Exactly the opposite. It sucks for intercity buses, cause there's no point. Bus stops are rare and buses don't "bunch up". It's essential for city buses.
This is how it works in every big city in Poland, it's working great. More cities started to use this system over time, because it improves the scheduling so much.
The point of city buses is that they drive in traffic anyway - they rarely drive over 50 km/h and they stop every 5 minutes. How regular they are is MUCH more important than how fast they drive.
If you skip 3 stops because nobody waited there - you get to the 4th bus stop 5 minutes too early and wait for 5 minutes there - potentially blocking the bus stop for others and wrecking havoc with the scheduling. Much better to split these 5 minutes between the bus stops where nobody is blocked.
It's like in gamedev - you don't want to optimize happy case cause you're making the situation WORSE. If your fastest frame takes 5 ms instead of 10 ms it changes nothing at best (and makes for more jerky movement at worst). If your longest frame takes 15 ms instead of 18 ms - it means you can keep consistent 60 FPS now - and that's a HUGE win.