When distortion reaches or exceeds 100% in bass, it is massively audible in my sweep tests. I mean it sounds like the woofer is falling apart. So definitely agree with you that the industry has had a heavy hand in this spec, creating bigger numbers at the expensive of fidelity. In car audio they have "SPL" and "SQ" competitions. The former is just how loud, no matter the fidelity. This spec is not as bad but definitely not sound quality optimized.
It also lacks audibility concerns as harmonics fly into 1 kHz and beyond where our hearing is much more sensitive.