People like the convenience of having their bookmarks and saved passwords available, so the Incognito mode serves a purpose, it's just not what its name implies. Only its name is a problem, the description on the starter page correctly describes the behavior.

"Guest Mode": (1) hides the identity on the internet, and (2) hides the activity on the local machine.

"Incognito window": (2 only) hides the activity on the local machine.

To clear the confusion, "Incognito mode" should simply be renamed "Ephemeral mode" or "Transient mode" or "No-Save mode".