I might actually disagree on this one. If it was the first year of their PhD, then yes, it does seem like grunt work which is dissatisfying, but they will have fully learned the ins and outs of their group's code framework.

In the process, they would have understood nearly every approach taken by the group towards producing the results that it does, and I bet that has helped them when they've ended up modifying that same code later for their research. And with fewer supervisor meetings to work out exactly what X, Y and Z part of the code does because they will have worked on it themselves.

I'd say I've easily spent 6 months just spending time getting my head around all the code we work with anyway, so at the very least, I hope that made their following years of research more productive.

Not necessarily. It was definitely bad if they want to become academics and needed to publish papers. But if they knew from the start what they were getting into and wanted to transition from physics to software development then it might not have been so bad (although there might have been a more optimal path).

A bad advisor wouldn't care what his students wanted, but a good advisor might still have students work on this kind of project as long as they were aware it wasn't going to help them get a tenure track position in the future. If they wanted to go work at a national lab doing HPC work and programing it might have been plenty ok for their career (This is what I am transitioning to now) or if they want to go work for a hedge fund or apple it might also be an okay option.

I don't know. Having "rewrote X kloc of scientific Fortran to modern idiomatic C++" on your CV should get you to the head of the line in many places when looking for a job.