As a seller this absolutely sucks. Not saying it's a bad thing. It's not. But imagine you're a small business, and you price the croissants you've just spent hours making at €1 each and you know you'll only get €0.79 of that. It feels unfair. Especially since you'll end up paying even more tax after that too.
So I guess you could say the US method favors the seller, while the (mostly) rest of the world method favors the buyer.
Then price the croissant at €1.25 instead? The US method would still make the customer pay that amount; the only difference is whether the math is done once by the seller or every 10min by a new customer.
Lower advertised numbers (even if the out of pocket cost is the same) will likely result in more customers and sales.
Where I live, we go even further: if you offer a subscription with a binding period, you also have to write the minimum total amount to be paid by the customer before they can cancel the subscription.
This helps prevent customers into getting tricked into spending more money than they can really afford, which is a good thing?
Oh wait. That’s exactly how every small business in the world outside the US does it.
And small businesses in Europe are thriving far more than chain shop laden America.
And when those business owners come to the US they nearly gag at the ridiculous arbitrary pricing they see here.