This is a really useful hack, because it's an easy way to get a third channel with volume control. That's far more important than the waveform itself, IMHO. Namco106 is great for NSF format (less useful for Famicom, useless for NES), but when you've got that many extra channels it seems wasteful not to use them, but when you do it sounds less like NES music. :)

I hacked up a version of the ROM so it doesn't use delay loops, it does sound like there's a pretty good amount of frequencies available still (when you vary the segments). Hopefully with some full octaves, but it's still good even without that (listen to Pressure Cooker on Atari 2600 for example, good tune, heheh).