As a non-designer who's had to fight many designers on this, I'd like to draw your attention to the fact that this is about perception. It's about a user's first impression regarding usability prior to actually using the system. It's not an actual impression based on their experience after interacting with it. That impression can quickly evaporate the moment they try to do anything with the interface. If time and money have to be allocated to develop a product, use them wisely. The properties of this principle seem to be more relevant to marketing and advertising than actual UX.

I believe that the wrong take-away from reading this law would be that improved esthetics implies improved usability. Attempting to place esthetics and function on the same pedestal would be a mistake. When it comes to usability, function is superior to esthetics and should almost always be given priority, no matter how ugly.

I agree that esthetics can and should be used in a way that it supports function, but as you add to it, there will always be a point of negative return (functionally speaking). If you misunderstand what that law is saying you might be misled into thinking that esthetic climax and usability climax are on the same locus. I think we can agree that something can often still be made even more beautiful way past the point where it's almost completely unusable. Adversely, you might be called into making something uglier in order for it to become useful again. Better get comfortable with the idea.