It's visually attractive, I suppose...on one level, at least...but questionable as to whether it makes sense mechanically. If the insole is that narrow in the waist it may not be fully functional or healthy for the foot, esp. if it's RTW. And to make the outsole that narrow if the insole is wider, exposes the vamp leather to abuse that it would not otherwise encounter.
The outsole should be as wide as, or a little wider than, the insole and vamp combined. It's a protective measure.
Beyond that it is interesting to note that this style of waist goes back at least to the late 19th and early 20th C., especially on lady's shoes.
I admire your insights, and I suppose you're right. But if shoes were all about practicality and mechanical pragmatism, we'd be wearing glued together Hush Puppies. *shudder*
Your fundamental observation is correct up to a point...although the example is entirely off base--nothing practical or pragmatic about glue and splits.
That said, what makes a Traditional, bespoke shoe so attractive is that it is the culmination of 10,000 years of evolution/development deliberately and mindfully aimed at combining the most practical, durable, sound, pragmatic, etc. techniques, to create something that is both functional and beautiful. But make no mistake the "beauty" part of it is, and must be, subordinate to the practicality.
I'm sure there will be those who would rush to disagree...Style vs. Substance...but shoemaking, as a Trade, has had this intent all along. It is part of the "ethos" of Shoemaking-as-a-Trade, if you will.
And again, in that context, I must stress I'm not against ornamentation or styling devices (I actually like, from a purely aesthetic POV, the narrow waist) ...as long as they do not detract from the life or function of the shoe. Which, in this circumstance, I suspect (or at least question) it does.