I think this approach makes sense for hardware but not pure software.

I think its easier to adjust pure software iteratively than hardware. So with hardware, it makes sense to have different teams working on similar but different things because variations of ideas need to be fleshed (and thoughts that spawn off those ideas) and it can be hard for one team to do this iteratively.

If you're right and this is where it came from, I think largely pure software teams doing this are wasting resources, but if its hardware I don't agree its wasteful