I would expect anyone doing sysadmin work on Linux in any sort of centrally managed network would have exposure to it. It is certainly relevant any time you are messing with NIS/LDAP configs and troubleshooting.
Your typical developer, even doing C app development I wouldn't expect to have interacted with nsswitch unless their local name resolution was broken somehow and they were trying to fix their own problems.
The build failure is easy to fix, so I created a repo at [2] which builds a program against a glibc with static nss. I verified with strace that it does indeed check nsswitch.conf and try and load dynamic libraries (I'd at least submit my patch [3] for the build failure but I find mailing lists to be a hassle)
All this said, I wouldn't call it undocumented - it's documented in the `configure --help` itself as well as the online version [4], and it has an FAQ entry [5].
[1] https://sourceware.org/bugzilla/show_bug.cgi?id=27959
[2] https://github.com/aidanhs/gcc-static-linking
[3] https://github.com/aidanhs/gcc-static-linking/blob/1f04425e2...
[4] https://www.gnu.org/software/libc/manual/html_node/Configuri...
[5] https://sourceware.org/glibc/wiki/FAQ#Even_statically_linked...