Cycling computers blend calibrated wheel sensors with GPS data to give the most accurate distance, too. I believe Apple Watch refuses to use bike wheel and crank rotation sensors, but Garmin does use them.
What you're saying makes sense, of course. I found some hundreds of meters of discrepancies in some rides (Apple Watch 4 vs. Karoo 2). Less than 1% of the total distance, of course.
But also, cyclists are less concerned about specific speeds.