OK, now I understood the gap. There is a technical limitation for relocation resolution when the relocation is against a different section. This means that for function sections we de-facto have no relocation finalization, only conversion of symbols from "global" to "local".

Hence, for a "file-sections" flag, we would only resolve relocations within a given file, but will leave intact relocations that cross the file boundary. Accordingly, this means that "function-sections" is identical to generating a static bundle object per original object file, and bundling them all together inside a .a archive.