While it's generally not a good idea to try the visa on arrival option when you can't get a normal visa, the transit visa isn't just for transit as such.
"To accelerate the strategy of “Development Driven by Innovation”, sanctioned by the State Council, as of January 30, various ports of entry in Shanghai [...] are to implement a 144-hour visa-exemption transit policy [...] First and foremost, the length of time for visa-exemption stay is extended considerably. With the previous 72 hours doubled, foreign passengers would have ample time to conduct short-term activities such as businesses, sightseeing, visits and exhibitions while in Shanghai."
http://www.sh-immigration.gov.cn/listPageEn.aspx?lx=40&id=44...
>I had been waiting in line to take advantage of the city’s 144-hour ‘transit’ visa which allows travelers with an onward flight to stay in Shanghai without needing to secure a visa before they travel.
Yes, AirBnB should inform traveler's of local rules, like registering with a police station. But ignorance of the law, combined with repeated abuses shouldn't be overlooked.
>Since 2015, I have used the transit visa system on six occasions
Nothing to see here, folks. Follow the rules, don't abuse them.