Well, if you ever needed
debug mode, then bughunt mode was definitely called for in case you wanted to avoid cheating.
Otherwise, the origins of this feature were the OG aliens who loved to hide in some corner of a tiny shed when everyone else had been killed, and the TFTD cruise missions with their 'I
will hide in this cubboard all day' critters. It certainly 'made sense' there.
I've also had instances in XCF where bughunt mode has been beneficial, like a ninja strolling in the woods after every other Lotusite has been terminated and I have no scanners on that mission (early game, mostly). Or I missed a sweep due to wacky LoS and some enemy managed to wander off into some labyrinthine building. Or decided to hang out on the map's edge.
Granted, my bughunt mode is a little bit customised, and as the game goes on and especially as psi-vision and scanners come online this is much less necessary.