This seems like something more intended to avoid a bunch of pointless attempted signups from people who don't understand what having a domain means who then won

This seems like something more intended to avoid a bunch of pointless attempted signups from people who don't understand what having a domain means who then won't be able to do the later step where you verify that you actually own it. A client-side check's not so unreasonable for that kind of thing. Of course then you still want the list to be accurate and/or actually have some working support flow that results in an overzealous filter getting fixed. The code suggests that they do or did have a process at some point: the list of specific domains is an override that allows domains that would otherwise match one of the regexes and get blocked.