1. must display over whatever the user is doing (sort of like a Windows elevation prompt) and
2. must not be handed to userland in a way that it could be automatically recorded or persisted, other than by the user's explicit action.
Giving SpringBoard the ability to render SMSes is really the only way to implement Flash SMS in a way that adheres to its semantics.
There are other types of SMSes as well—WAP Push messages, for example, or WMI (voicemail indicator) Activation messages. Heck, your carrier can even use SMSes to directly write data to your SIM card. These aren't so clearly a layering violation as Flash SMS, as they are just pure OS-layer concerns; but if you're already implementing a kernel library for "SMSes triggering OS-level functionality" for Flash SMS and the like, you may as well put the code to handle these cases in there as well.
I don't think I've ever received such a message, and I'm surprised Apple bothers to support such a thing. What in the world is the use case? That sounds extremely user-hostile, and if it were me I would throw it out. Especially once I realized my app needed special security just to handle this bonkers SMS type.
This message type literally has only one use on modern phones: to allow police to trace your location.
But boy, imagine the argument that'd get started if Apple decided to let you turn acknowledgements for SMS-Type0 off... (really, I imagine police would just lean on carriers to refuse to activate devices that have this capability, citing "network incompatibility.")
I'm just a layman guessing, but I'm thinking Amber alerts and Flash Flood warnings... or the Hawaiian nuclear strike
They are entirely separate from SMS, you are correct. WEA messages are sent inside System Information Blocks (SIB12 specifically). Other SIB blocks are how your phone learns of authorization to use the tower, what frequency channels to use, neighbors of the tower, and other control related info.
At some point my bank stopped sending these (I don't know why) and it was worse for a while.
Now, with the automatic code extractions into clipboard things are again as they should be because I don't need to care about this at all anymore (90% of the time, as most clipboard features in iOS/macOS this one is flaky too)
Alerting. The system used for amber alerts and similar is US-specific, while the SMS stack works worldwide on every carrier and mobile phone.
I'm not surprised there are some many obscure features in the spec, but I am surprised they are actually implemented/used these days.