Specifically, it allows the open-source, auditable microG apps to impersonate the closed-source, unauditable Google Play Services apps.
I think the larger problem, the one that caused the microg gang to go this route, is the increasing control Google wants to hold over their platform. Fanatics always promote Android as the "open source alternative" to iOS and Windows Phone, but if you have to strip out so much proprietary gunk that it renders the device unusable, how can they claim it's open source with a straight face? Sure, the core Android code and kernel is still open, but there's a huge difference between being able to boot a device and actually using it daily.
(Edit to add: I agree with everything in your second paragraph.)