Quote - " It is a bug or at the very least a flaw in the implementation."

I don't think it is a bug nor a flaw. They had to find something to define the level zero, upon which the rest of the atmosphere settings are defined. There were basically three possibilities: the sea level, the ground level or a specific setting created just for that purpose.

The ground level is not a good reference point because it varies tremendously, it has ups and downs. Creating a specific setting could have been the best choice but in the real world, the sea level is normally an important reference point (for example, altitudes are measured relative to the sea level). So, using the sea level for that seems to me like a logical choice.