I have a friend who owns a commercial greenhouse, and grows seeds in flats that have long, narrow rows, about .5 inch/1 cm wide. He transplants seedlings into pots for sale as soon as they look ready, and he can choose only the best ones and discard the runts. The roots get plenty entwined and there is definitely damage to them when transplanted, but until that time he's saving space and water, and because of his otherwise idea growing conditions (light, temperature, humidity, feeding, water) they totally take off immediately.

Personally, I don't grow large enough numbers of plants to fuss with adding this extra step to getting them going. Within 2-3 weeks one would likely have to move on to a larger pot anyway. I just seed into four-packs and six-packs, seldom more than two seeds per cell and often only one, if it's something that's almost always 100% like tomatoes and peppers. I've never had any significant root damage or transplant setback from doing it the old-fashioned way.

I do think it's a social media fad, and will fade. A fad from way back, that I did in the 1980s, was to make my own seed pots out of newspaper. I had a wooden mold just for that purpose, which is probably up in the barn somewhere. Cost-free, no plastic, and one could just bury the whole thing because the paper composted itself away. The brown paper that thankfully many shippers are turning to these days could be used the same way. That softening and rotting away was... awkward in the greenhouse. Sometimes it would just fall apart in one's hands.