Granted I'm not a pianist, but a jazz bassist. So I see it in light of the technical problems of the bass, which include intonation and tone formation. My approach is, if I'm struggling with a passage, I don't just keep playing it over and over. Rather, I stop and try to analyze what's hard about it, and what I'm doing wrong with my technique. Then I work on correcting those problems.
This is also what my kids' teachers do during lessons. Part of the reason for lessons is to learn a better approach to practicing.
A lot depends on what kind of music you're playing, but I often don't know what I'll be playing until I find out at the performance. The bassist is often the one who's expected to roll with whatever the rest of the band chooses. So the mastery of specific pieces can't just be an end unto itself, but it also has to pay off in improving my ability to approach the next piece. This requires making real progress on technique.
If you practice and make mistakes, you are building up muscle memories for the wrong notes.
As a piano player, what OP says wrings very true. It's tempting to just "play the piece" to practice it, but this is very inneficient, for the reason stated above. focused repetitions is order of magnitudes faster.