Just because there is a loophole in the regs which allows you to log it (and I am not convinced that there is, but that is a different argument), it doesn't mean that you have to log it or that you should log it. I have said it before, and I'll say it again. Pilot in Command means something. It means you are assuming complete and sole responsibility for the safety of the aircraft and its occupants. If an emergency should arise while you are flying it, I highly doubt that the owner of this aircraft is going to let you retain control of the aircraft. He (or she) is going to take over. That being the case, you are not, nor ever were, the pilot in command.
Using that line of logic, instrument students flying with an experienced instructor shouldn't log PIC time either. Nor should anybody who is getting checked out to rent a plane from an FBO. Those are times when the instructor would definitely take over if something serious went wrong.
There are plenty of times when a person is not the final authority for the flight, yet they still can (and should) log PIC time.
I'll quote the applicable section of Part 61.51 here:
(e) Logging pilot-in-command flight time. (1) A recreational, private, or commercial pilot may log pilot-in- command time only for that flight time during which that person --
(i) Is the sole manipulator of the controls of an aircraft for which the pilot is rated;
(ii) Is the sole occupant of the aircraft;
or
(iii) Except for a recreational pilot,
is acting as pilot in command of an aircraft on which more than one pilot is required under the type certification of the aircraft or the regulations under which the flight is conducted.
(2) An airline transport pilot may log as pilot-in-command time all of the flight time while acting as pilot-in-command of an operation requiring an airline transport pilot certificate.
(3) An authorized instructor may log as pilot-in-command time all flight time while acting as an authorized instructor.
(4) A student pilot may log pilot-in-command time only when the student pilot --
(i) Is the sole occupant of the aircraft or is performing the duties of pilot of command of an airship requiring more than one pilot flight crewmember;
(ii) Has a current solo flight endorsement as required under §61.87 of this part; and
(iii) Is undergoing training for a pilot certificate or rating.
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So, to address your specific argument...yes, "Pilot in command" does mean something. It means the person who is the final authority for the flight
*or* it means the sole manipulator of the controls. This is not a "loophole." This is the way the regs are written.
What you're referring to is an "old school" way of viewing PIC time, and there's nothing wrong with that. In fact, that very well might be how an interviewer will view PIC time, so it's good to make up and coming pilots aware of what to expect. However, there is nothing inherently wrong or illegal about logging PIC time when not the final authority for a flight.