What’s brilliant is your piece of rationalization. Apple would’ve avoided the notch if they could. They made a design compromise. When all is said and done, it’s still ugly.
For most users, the value of Apple’s “social currency” is meaningless. They will never enter into the hypothetical conversation that you presented. The iPhone has been ubiquitous for years. The social status of owning one is pretty much muted these days. The iPhone blends completely into the background.
When I see someone with an iPhone, I give a mental yawn. Nobody is impressed by an iPhone user anymore.