I agree, it doesn't make any sense. If City went out and bought Sancho and Brahim Diaz for 200M over the next couple years and they become squad fixtures, should we really say, "Oh I guess we were wrong all along, the club actually is pretty good at bringing through youth players?"
If the question is how good the academy is at developing talent, then it shouldn't matter whether the talent has gone on to play for the first team or some other club. City should get credit for Sancho, Arsenal for Gnabry, etc.
If the question is how good the club is at developing academy talent and integrating them into the first team, then a player who moves elsewhere before they're meaningfully integrated into the first team shouldn't count just because the club paid a big sum on the market to bring them back later in their career.