I'd say a linked list is preferable when you're writing a `malloc` implementation. It makes the code simple to understand (and small), you don't have any dynamic memory allocation available (because you're writing your system's allocator), and the size overhead is lower than alternatives. Linked lists aren't that bad in processors that lack cache, since then walking the list won't incur cache misses (every memory access is equally slow).

There are alternatives, of course. Your particular target might perform poorly with linked lists, so you might make your malloc use a different internal data structure. Or you might have plenty of flash but not much RAM, so you might trade code size for runtime overhead. Or... There are lots of alternatives, but a linked list is the simple default.

Arena/buffer-based allocation is also used to avoid an OOM at runtime not due to the lack of memory per se but due to fragmentation.