Common sense would lead one to that conclusion
Haven't come across it before. One school I know does give year average but haven't come across this level of complexity before.
Only thing I can suggest is that it more easily allows for tracking of each child's progress, which is a good thing. However if the calculation is dependent on the progess of the whole year then any issues could be camouflaged by a whole year group having similarly poor progress.
I would day that as an additional measure it might be helpful but as you say, I can't see how it adds a huge amount if the school are already giving you position in year ( which many don't).