The damning part is that even if the repair place uses an actual Apple battery with all the circuitry exactly the same the phone treats it as a complete unknown because it hasn't been approved by Apple and authenticated. If I open up two identical iPhones and swap the batteries I shouldn't have diminished functionality, the phone should still fully report everything it knows about the battery health.

What if you let the battery get wet/warm when replacing? Should the software trust that you replaced it correctly?

What if Apple's installer screws the same thing up? And if that was really a huge issue just locking out any battery monitoring is... worse because now there's just the meaningless 'You're battery isn't Apple approved and installed' warning.

The people taking crazy pills are the one's suggesting it just says "Service" rather than not knowing if the battery is genuine.

Yeah, it's actually a bit less forceful than I was remembering it when I wrote that paraphrase. :D