Seems like the most reasonable way to pick a covenant to me. I don't give a shit about aesthetics or lore. My characters actual abilities are way more important to me.
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No, it's not bullshit at all. People will absolutely pick and choose players for groups based on what covenant they pick. Dungeon mechanics literally force them to.
You don't care about that, that is fine. But that does not make it any less real.
Also, I don't think people wanting to actually maximise their chances of achieving goals is "toxic". Bad game design is not their fault. It's not the fault of players that rogues were 100 times better than any other class in BFA M+, for example. That is Blizzard's fault.
And that comparison is not accidental, picking the right covenant for the dungeon will literally allow you to skip trash packs, just as shroud does.