Probably a better use case would be connecting older devices like the Nintendo DS that don't support WPA2 to your network without forcing all of your other devices onto WEP.
Ideally you'd have 802.11ac/ax with 2 separate PHYs each with 4x4 (even if the clients are 1x1 or 2x2 the additional beamforming helps) set to two separate channels.
That's not to say it won't function well enough in a pinch but I wouldn't seek this out as a permanent answer if I were buying new.
I imagine the OP's use case of IoT did not require huge amounts of bandwidth.
Like I said this functions fine, as is evident by it having been posted, but the question was why it wasn't a very good repeater not was it a functional use of an existing pi 0 laying around.
It's also not the best you could do buying new if that is what you had to do as ~$16 will get you a 2x2 802.11n repeater that functions much better, has external antennas, and has an ethernet port too. Not $10 but it's also enclosed and doesn't need a power supply or uSD. ~$30 will get you decent AC repeaters you could use outside of a singular IoT project. Less for either if you're willing to go used. The ideal 4x4 ax double phy wireless repeater is indeed going to be more than a pi 0 but it was an example of what makes a repeater good (to the question) not what should have been purchased for this project.
Again nothing wrong with the solution used here, that's not where my comment was pointed.
[1] https://www.embedded-computing.com/articles/a-lesson-in-wire...
This setup could let me do it without the USB wifi hanging off the USB OTG adaptor.
* This is not secure but it’s fine for my vintage computing hobby