Generating on-the-fly names for arbitrary instances within a variations space is difficult problem. What software needs in order to be able to unambiguously identify an instance is different from what users need if instances are exposed in font menus.
On the back end, there needs to be an identifier that can be used to instantiate on the system. That's what Adobe's new technical note
on generating PostScript names for Font Variations does. This is important, because let's say you create a document using a custom, arbitrary instance, and then send that document to someone else who has the variable font installed: software needs to be able to accurately recreate the specific instance used in the document, which means the document has to store a pointer to that coordinate in the variations space, which depending on the document format might be no more than the generated PostScript font name. So there are good reasons why that name might need to be a concatenation of axis tags and axis coordinate values.
But such a name would totally suck as something to expose to users. On the other hand, generating human-friendly names for arbitrary locations in a multi-axis design space seems basically impossible. Let's say I have named instance (names for specific locations, stored in the font) for SemiBold and Bold: how can an algorithm automatically generate a unique human-friendly name for each of the possible locations in the design space between those two named instances?
This seems to me primarily a UI issue, and the solution probably has to involve allowing users to assign nicknames to instances. In CSS, this seems trivial, since basically anything in CSS can be given whatever name you like. In desktop apps, it is more complicated. An individual app or suite of apps might provide a model for assigning nicknames to instances, at the document level or in a shared library, but without any interoperability or consistency across the rest of the system or on other platforms.
I think there's room for a standard for nicknames for arbitrary instances, but am not sure where this would have to live, either in software or in terms of a 'home' for such a specification. Should it be part of the OT spec? If we want it to be as flexible as CSS naming, it isn't necessarily limited to variable font instances or even just to fonts.