The Large Disk HOWTO elaborates a little more on what the reservation was used for and what effects it had on reporting disk size:
Many old IBM PS/2 systems used disks with a defect map written to the end of the disk. (Bit 0x20 in the control word of the disk parameter table is set.) Therefore, FDISK would not use the last cylinder. Just to be sure, the BIOS often already reports the size of the disk as one cylinder smaller than reality, and that may mean that two cylinders are lost. Newer BIOSes have several disk size reporting functions, where internally one calls the other. When both subtract 1 for this reserved cylinder and also FDISK does so, then one may lose three cylinders. These days all of this is irrelevant, but this may provide an explanation if one observes that different utilities have slightly different opinions about the disk size.
It does not seem that SeaBIOS actually makes use of that reservation anywhere though, so there is no reason service 8 should not report the true (emulated) geometry. As such, it is not unreasonable to consider it a bug after all. While there might conceivably be software in the wild that relies on this, by blindly attempting to undo the last-cylinder reservation, I think the probability of such being found is rather small. (I would expect software interested in the true disk geometry to consult the FDPT instead anyway.)