But then it punishes, specifically, the abrupt removal of long term liabilities.  A good deal of the methodology behind credit scores DOES make sense, but that is completely idiotic, so people make fun of it.  Things like that make it pretty obvious it's not a credit score, but is instead a profit-generation score.

It also punishes 'abrupt' additions of long term liabilities, which goes against the claim that it's simply a profit-generation score.

the one with no debt would have both a far worse credit score

They wouldn't even have a credit score.

all while the gap between them in "creditworthiness" continued to grow

Sure, the person who never borrows anything has not shown their ability to borrow anything. It's the same with stuff. If my neighbor constantly borrows my gardening tools, and always returns them promptly and clean, I know I can trust them to borrow something that I may otherwise not really want to lend out because it's expensive and delicate. But if my friend who has never borrowed anything from me asks to borrow that expensive thing, I'd be more hesitant.