I could never see the sense of "stopping" the string in one fashion for open strings, and in another fashion for fretted notes. Neither does it seem logical to use different materials for the two different situations.
On an average guitar, with 19 frets, there are 120 possible notes, 114 of which are formed by holding the string onto a polished nickel silver fret, and six notes formed by bending the string through a groove in a piece of dead animal.
Holding the string in a closely fitting nut slot affects the strings vibration and exaggerates "end effects", which are one reason for difficulties in intonation, particularly on the stiffer strings. The end effects are different for each string, and also for different "partials" within the same note.
Allowing the string to rest gently but firmly against a fret for all position minimises these end effects, and reduces the need for intonation correction at the saddle.
I first started using it after working on Martin Carthy’s guitar, which had been modified with a zero fret- to begin with I thought of it as a way of improving string height and string length accuracy, but Ive come to see it more scientifically. Maccaferri and Gretsch used the idea in rough form, and a number of modern makers are beginning to see the advantages. One famous Spanish maker used a similar idea, where the bone nut is shaped into two section, fret and spacer formed from one piece of bone.
Although it has been used on cheap guitars, when done properly, it is not a short cut in manufacturing. Even if it was , it wouldn’t be appropriate to save a small amount on an expensive guitar. To take advantage of its benefits, the angles of the strings over the zero fret need to be carefully adjusted to be similar to the angles produced by finger pressure, the slots in the nut are shaped and smoothed to aid easy tuning, and it is very important that the zero fret is at the correct height for proper string clearance.
Its difficult and time consuming to do properly, but I wouldn’t do it if I didn’t think it worthwhile.