It's possible that some other custom format is better in absolute terms for models trained specifically for the custom format. But for the current ecosystem, where models are trained primarily using float32, bfloat16 is a very good choice.
It seems like a huge mistake if they missed key optimizations, but I'm happy to take your word for it.
Are there write-ups that go in detail about these mistakes? It's the kind of somebody-is-wrong-on-the-Internet topic that would result in flaming blog posts. :-)
I mean, I helped design the posit spec and the twos complements treatment is something not even John Gustafson understands... The key insight is that the hidden bit is -2 for negative numbers (instead of 1 as it is for positive numbers). It's kind of nonobvious and I happened upon it by accident one night while fooling around with circuit diagrams. If people really get serious about it I'm sure though that it will get rediscovered by EDA folks smarter than I.