Electrical – Short circuit between Vdd and Vss after high current through microcontroller clamping diode

I would recommend using Power Input for both VDD and VSS (or any power pins on an IC for that matter). If you choose to use these types of pin labeling, then it allows you to verify that all power supply pins are connected and that there is a source that can provide power.

If you set VDD or VSS as a Power Output then the software will see it as something that provides power for the circuit. This would also give you an error if you have multiple chips on the same power supply (e.g. two of these chips). The output of a linear regulator would be a good example of a Power Output.

Making both VDD and VSS the same is a bit counter intuitive compared to current flow, but these are being used as system terms, not electrical current/voltage terms.

As you say, it is a complete non-issue for high-volume manufacturing, which is where the vast bulk of such chips goes — and those are the customers that the chip makers pay attention to. Hobbyists don't buy nearly enough chips for them to even notice.

But yes, there are real advantages to this arrangement, both on the chip and on the board. Power and ground are distributed on the chip in metal layers on top of the silicon, and these connections interfere the least with signal connections if they run parallel to each other to the greatest extent possible, and this includes the external contacts.

On the PCB, you get the best performance out of the decoupling capacitors if their connections are as short as possible, and putting the pins on the chip next to each other makes this much easier. It also helps avoid congestion with signal connections here, as well.