The 80% rule doesn't mean the circuit can't handle 20A. It is fully rated to deliver 20A, but you may experience nuisance tripping, or faster wear due to running at 100% load all the time.
If it's only good for carrying 16A continuous, it's only good for 16A. You can pull a couple hundred amps through it for a short duration, so let's call it a 200A circuit.
We do not have nuisance tripping or 'faster wear' by using a circuit to its nominal capacity.
You can have nuisance tripping. You've got 18amps plugged in running constantly, and then someone plugs in a 2A load with a bit of inrush, and bam you end up with a tripping breaker.
The breaker does wear itself down when it opens under load. It draws an arc inside and wears at the contact points. Its obviously worse under a fault condition, but it still occurs if there's any load at all. Breakers that have been manually turned on/off lots, or experienced lots of tripping show up on thermal scans ahead of their less abused counterparts. This is often why.
Circuit breakers are primarily heat based devices. Controller the thermal loading of a panel in a residential home is pretty difficult. I have to lower the ratings on every piece of electrical equipment if the temperature is known to be higher than 30C in the area due to this. Some homes are going to have air conditioning and it helps cool the panels while others are going to have the panel next to the furnace in a mechanical room where the temperature is 30C all day.
Your option would be to say that this 16A rated circuit but it is ok to overload, sometimes... just be careful you know. since its really ok to pull 20A through it, but it probably won't trip until you're at least 125% OVERloaded... this sets a more dangerous precedent than saying "stay under the rating"
There's clearly arguments to both sides of thinking, and i doubt we're going to change your opinion on how the circuit should be labelled, but I think it makes sense, and is safer for the general public, the way it is laid out now. Besides, that's the electrical code for the installer, not the end user. The end user can run 20A all day if they want, but they're probably going to experience tripping more often than their neighbor.
If you really want to dig into the electrical codes It gets even more confusing when you start to look at the fact I can put a 50A breaker on a #12awg wire when I'm powering up a 20A motor load. I certainly wouldn't call it a 50A circuit, since the load is only around 20A once the motor is running, but it needs to survive that inrush current so its got a nice big breaker. and if the motor can't successfully start on that 50A breaker, I'm allowed to put a 60A on it. Still not going to call it a 60A circuit though. That's insanity.