I'm pretty sure that also people who write novels aren't held back by how fast they can type.

Probably not. It was a euphemism.

But it's a pretty good indicator of skill level. High wpm means they write a lot.

It's also helpful as a burst speed. It doesn't mean you are always cranking at 120wpm, but you can hit 120wpm when the words in your mental buffer is overloaded and you can empty that fast.

Try writing on pen and paper, you'll find that your mental buffer fills up quickly and you aren't able to hold all of your thoughts, so you have to drop some. It has its use cases, sometimes you have to think more and write less. But in general high entropy write capacity is a valuable spec to have.