Of course, it’s impossible to generalize, and that’s the point. I don’t think we should eliminate one kind of feature due to an assumption that it’s always redundant to the other, when we know the assumption will generally break in some parts of the world. Better to make sure the two features are linked but distinct, so that data consumers can easily deduplicate them as needed.
It’s a different thing, but data consumers need to be able to conflate them depending on the use case. A local political map will distinguish the City of Atlanta from its suburbs, and the unincorporated places will go unacknowledged. By contrast, on a topological or transportation map, the city limits may be present as a subtle dashed line, but it’ll matter much less than the city (labeled as a dot or star) surrounded by a sprawling built-up area (highlighted in yellow).
Regardless of the map’s theme, at low zoom levels, the city’s prominence should relate to the overall urban or metropolitan area rather than the city proper. Otherwise, cities from London to San Francisco get swamped by places you’ve never heard of, while cities all over China will get overamplified because of large populations in satellite cities that lack separate administration. Tightly coupling human geography to administrative geography is how mappers and developers grow desperate enough to propose falsifying population counts and arbitrarily assigning one city’s population to another city.
Granted, the status quo of label members for populated places leads to some duplication and maintenance overhead. I see that as an argument to stay focused and avoid stuffing too many tangential attributes on both features like coats of arms and names in constructed languages. Wikidata can store a lot of this information – not to mention the detail about which administrative areas a city administers.
But as to the original question, I think it’s pretty clear that admin_level=* should not serve two contradictory purposes at once on potentially the same feature (especially if the boundary hasn’t been mapped out yet).