Looking at commit history led me to this topic: Email domain blacklist is not consulted when receiving emails (and creating staged users), the original reasoning seems to have been that staged accounts were a spam vector.
Would it help to reword from this:
A pipe-delimited list of email domains that users MUST register accounts with. Subdomains are automatically handled for the specified domains. Wildcard symbols * and ? are not supported. WARNING: Users with email domains other than those listed will not be allowed!
to:
A list of the email domains allowed when creating user accounts. When set, any email with a domain not listed in this list will not be valid for account creation (including staged user accounts). Subdomains are automatically handled for the specified domains. Wildcard symbols * and ? are not supported.