I strongly disagree with this. While I'm no expert in world history, I can say from my local perspective, there are several cases of "cities" (regions) objecting to belonging to one empire and going to another instead, the regions of Southern Jutland choosing to go back to Denmark while Schleswig-Holstein chose to remain German being perhaps the most prominent. On a larger scale, USA going independent and throwing off the British rule can - imo. - be seen as an example of what the loyalty system tries to mimic, as I guess many of the former colonies becoming independent can be. Is the game mechanics 1:1 identical with reality? No - but I do think there's enough foundation in history to make the system meaningful.
Secondly, there's the question of forward settling - again, I don't agree with your analysis. In Civ5/early Civ6 I had plenty of cases where I placed my cities in what I considered a coherent matter, but there would be one hex either on the fringe or even in the center of my empire that would be a valid city spot, and sure enough, an AI settler would march in and place a city there. That - imo. - is just plain nonsense from a realism AND from a gameplay perspective.
Now we can always discuss if the loyalty system is THE BEST solution to this issue. I'll probably agree it isn't. One thing the loyalty system fails to take into account is the local cultural pressure, i.e. how long has someone owned a territory. If Civ A and Civ B arrive at unclaimed land at roughly the same time, the fact that Civ A get's to settle a couple of cities first should not place severe loyalty pressure on a city founded by Civ B if they place a city next - simply because Civ A has not really established a cultural presence in the area yet.
Which sort of brings me to another question someone brought up earlier in this thread.
I think the game needs another way to lay claim on land than just by building a city because it'll add more flexibility around the loyalty system. One example: If I place a city, and the city starts generating a lot of culture, this should allow me to state some sort of "cultural claim" on neighboring areas - be that handled through regions like in Humankind or by some other means. If someone then settles a city in the area, I should either get some casus belli to DoW them and/or the city should have loyalty towards me, possibly resulting in a resolution.
Another area where I see other ways to claim territories being relevant is in resource management. If I find an unclaimed resource somewhere, I should be able to place some sort of outpost to work and harvest the resource for my empire. Of course, if someone else comes along, they should be able to content my claim on the resource, particularly if I have not left military presence to defend my claim. Such a system would imo. be both more historic and more meaningful in terms of game mechanics than having to place a city in every area where you want to extract a resource.
Yeah, I miss the whole "outpost" system from Civ3 (?). It feels weird to me that I use the same unit of a settler to go claim some arctic oil as if I were going to settle Kansas, for example. Or, for example, it still feels weird to me how you can be getting to the medieval or industrial eras, and there's still large pieces of land with no settlements on them. Now, I don't necessarily think that every piece of land needs to be claimed in a game, and the barbarian tribes mode I do think helps a little bit in filling out some unclaimed areas, but I don't think it quite goes far enough. I wish at times there was a sort of mechanism where if you have a group of unclaimed tiles in an area, there's a chance that it would simply "spring up" into a city. Even using the free cities method - if you had a large tract of land that was unclaimed, maybe instead of going barb camp -> city-state, there should just be a new free city that pops up. And then naturally if they are culturally close to another civ, they would join up or could in theory be conquered by someone else.