I would guess the logic behind logic zeros is that reading (digits) and decimal point are somewhat independent of each other (from display IC perspective). Thus, just showing leading zeros and not taking into account decimal point position is a much simpler solution than suppressing zeros.
DMM logic is something like this:
- set input signal range
- scale input signal by a set range
- sample scaled signal with ADC. ADC always gives unit-less answer in a fixed range (for example, 0-2000 or 0-50000)
- take ADC value and display it on LCD
- based on range, set decimal point and LCD marks (V, mV, etc.)
If internal ADC signal is close to 0 or equals to zero, it is smart to add leading zeros just in case. So "0" is showed as "0000" on display which looks reasonable with any decimal point position: "0000", "000.0", "00.00", "0.000". It requires extra logic to show proper " 0", " 0.0", " 0.00", "0.000".
I prefer DMMs and other instruments to not show unnecessary leading zeros, because I find it misleading and inconsistent. If you press "0" "0" "decimal point" "5" "3" on any calculator, you should get "0.53" as an answer, not "00.53".
Agilent/Keysight U1272A does not show extra leading zeros.