There are plenty of use cases where this is appropriate. If you wanted to allow users to login to Hacker News with their Google accounts you would use this option because you do not care what workspace they belong to.
> Some applications (e.g. Tailscale) take advantage of the public Google OAuth API to provide private internal corporate accounts.
This is a misuse of the public Google OAuth API. Your first link clearly states: "A public application allows access to users outside of your organization (@your-organization.com). Access can be from consumer accounts, like @gmail.com, or other organizations, like @partner-organization.com." In other words it is intended for scenarios where you want to allow access to users outside your workspace.
> Instead, Google instructs you to look at the "hd" parameter, specific to Google, to determine the Google Workspace a given user belongs to for security purposes.
According to your second link the "hd" parameter only tells you what domain the user belongs to, it does not tell you what workspace the user belongs to.
> You can avoid this issue by using a custom Google OIDC IdP configured for internal access only in your applications, rather than using a pre-configured public Google OIDC IdP
So Google offers an OAuth integration option that actually restricts access to your specific workspace. Choosing to ignore this option and instead integrating with the option designed for public access from all Google accounts, and then calling it a vulnerability when someone can login with an account from another workspace, is frankly, absurd.