Knowingly and willingly giving users a false sense of security? How is that not worse in every way?

If they couldn't manage to get false negatives down to an sensible level without compromising security in such a blatant way, there's two courses of action: Live with it, or don't release it.

Or release it and make money with your cool feature that competitors don't have.

Spot on.

This is a marketing gimmick, not a security feature.

Just as with fingerprint readers[1] the target audience is people who otherwise wouldn't lock their phone at all.

[1] https://arstechnica.com/apple/2013/09/chaos-computer-club-ha...

How is this any different than the swipe to unlock pattern? If you go to a starbucks and sit down for 20 minutes in a higher seat, you can get the passwords to probably 2-5 phones depending on everyone's security and how crowded it is (I inadvertently memorized 3+ coworkers' unlock patterns because they're so easy to see).

If someone has physical access to the user they can probably get into most people's phones (that's just saying people aren't careful enough though).

That could be the case, after all it's not a Diebold ATM.