I don't think this is a bug in the license, it simply means that the license may not convey all the rights a user might wish that it would. But in the nature of things, it cannot convey such rights without drastically restricting the license, and the cases where this in fact constrains a user are few.
Terms of the License and Their Effects
In the CC-BY 4.0 license section 2(a)(6) reads:
No endorsement. Nothing in this Public License constitutes or may be construed as permission to assert or imply that You are, or that Your use of the Licensed Material is, connected with, or sponsored, endorsed, or granted official status by, the Licensor or others designated to receive attribution as provided in Section 3(a)(1)(A)(i).
This makes it clear that any licensed work may not be used as an endorsement, which is the main thing that publicity rights protect.
Section 2(b)(1) reads:
Moral rights, such as the right of integrity, are not licensed under this Public License, nor are publicity, privacy, and/or other similar personality rights; however, to the extent possible, the Licensor waives and/or agrees not to assert any such rights held by the Licensor to the limited extent necessary to allow You to exercise the Licensed Rights, but not otherwise.
Now just what does that grant to the licensee (aka the user)? It does not grant publicity rights. What it does grant is the ability to exercise the rights granted elsewhere in the license, without being stopped or hindered by publicity, personality or moral rights claims from the person licensing the work, and no more than that. Now what are those "Licensed Rights"?
Section 1(g) of the license reads:
Licensed Rights means the rights granted to You subject to the terms and conditions of this Public License, which are limited to all Copyright and Similar Rights that apply to Your use of the Licensed Material and that the Licensor has authority to license.
Section 2(a)(1) reads
Subject to the terms and conditions of this Public License, the Licensor hereby grants You a worldwide, royalty-free, non-sublicensable, non-exclusive, irrevocable license to exercise the Licensed Rights in the Licensed Material to:
A. reproduce and Share the Licensed Material, in whole or in part; and
B. produce, reproduce, and Share Adapted Material.
Nothing in there grants any right to use any licensed work to imply any endorsement or approval by the creator of the work, or by the copyright owner, or by any person whose image appears in the work. Now by section 2(b)(1) the Licensor promises not to assert publicity (or related rights) claims that would stop the user from exercising any of the Licensed Rights. But under 2(a)(6) there is no right to use the work as an endorsement in any case. Using the work as an endorsement is not one of the Licensed Rights, and so the promise made in section 2(b)(1) does not cover such use.
It is true that the Licensor's promise in section 2(b)(1) can only cover the rights that the Licensor holds, and not any rights of third parties that the Licensor does not hold. This is not a bug, it is a feature of the license, because it is required by the law. No license allows a person to grant or waive the rights of a different person without permission.
The Question and a Response
The question reads, in part:
From this I gather that someone can't legally use a Creative Commons photo of a person, for example, in an ad for erectile dysfunction, because such use would violate publicity rights in most jurisdictions. In commercial photography it is therefore become accepted that a model release is used in addition to a copyright license agreement. ... would it be possible for [a] company to take a CC licensed photograph of a photographer and use that to endorse a product, without needing a model release?
It is true that a CC license does not function as a model release, and would not allow such a use of a photo of a third person without that person's permission in jurisdictions where publicity or personality rights are recognized. Even if the Licensor secured a model release from the subject of the photo, under Section 2(b)(1) the CC-BY license does not convey those rights to the user. The question suggests that if the Licensor is also the subject, that is if the licensed work is a self-portrait (aka "selfie"), then the promise not to assert publi8city/personality/moral rights constitutes an exception, and would allow use of the image in such an advertisement. But section 2(a)(6) forbids, or more exactly declines to authorize, "use of the Licensed Material [that] is, connected with, or sponsored, endorsed, or granted official status by, the Licensor". It seems to me that this means that use of a selfie in an ad, where it must seem to be an endorsement is not withing the rights granted by the license.
Even if I am mistaken and the license permits uses that might be seen as endorsements by the subject, I don't see this as a "bug" in the license. No wording could possibly convey the subject's rights in the common case where the subject is not the Licensor and the Licensor does not have those rights. If the license were altered to make the Licensor convey those rights, and therefore to warrant that a model release had been secured, the legitimate use of the license would be greatly restricted, to cover an unlikely edge case.
Reasons for 2(b)(1)
So why is section 2(b)(1) included at all? I don't know what the CC people had in mind, but it seems to me that it was to cover cases where a work is not being used as an endorsement, but a user might be concerned that an assertion of publicity or moral rights could be made, and thus the user would fear to use the work, which is contrary to the broad purpose of the license. Note that moral rights, in particular, can cover many things that are not relevant to endorsements or publicity rights.
would it be possible for [a] company to take a CC licensed photograph of a photographer and use that to endorse a product, without needing a model release?
I don' think so, because of the "no endorsement" provision in section 2(a)(6).
Now it may be that there are uses which could be made which would not constitute an endorsement, even an implied endorsement, but would, still fall under publicity rights, as interpreted in some jurisdiction. In that case, if the subject of an image is not also the Licensor a user would need to secure permission from the subject, or risk a publicity rights claim. Or else the user can, for such purposes, use a photo that comes with a model release, living the CC licensed images for all other uses.