In the former case - every employee is doing useful work. The latter definition is way more restrictive.
A central fallacy of present-day economics is the assumption that all economic activity is of equal value. GDP is a good example: A million dollars spent on healthcare increases GDP by a million. A million dollars spent on war increases GDP by a million. A million dollars spent on rubber dog crap increases GDP by a million. But these transactions are not of equal value.
I personally think that economic central planners and GDP growth targets are a major underlying cause of all this useless make-work. I call it the gerbil wheel economy.
Run, gerbil, run! Gotta make the opaque meaningless numbers bigger!
You can see it very clearly in very centrally planned economies that worship GDP growth, like China. They have entire abandoned cities-- things built for nobody, just to make opaque numbers bigger.
Actually, they are. The folks who spent a million dollars on rubber dog crap could have spent it on something else but they spent it on rubber dog crap. That million dollars is the value of that rubber dog crap.
Maybe you meant cosmetic dentistry, but even there, should we forever brand someone who didn't take care of their teeth earlier in life? What about folks who were given tetracycline when they were kids (which permanently stains their teeth)?
Maybe there's a good example in dentistry, but let's see one.
As to your "positional" argument, how are you separating out the "bad" positional change from "her teeth kept us from seeing his superior skills"? Or, is the latter also bad?
I mean yes you could argue that it might contribute to a class divide, but I think orthodontic treatment is much more affordable for the middle class than it was 20 years ago.
My point isn't that all dollars spent are equal, but that the world is so complicated that it is not easy to make a snap judgement about where the next big difference will come from.