I’ve seen Mell and others do this to speed drying (and her hair does always turn out lovely), but it seems like you’d be pulling out the product you just spent time carefully working into your hair. You could gently re-add product, but the whole time you are applying product you are supposed to keep wetting your hair to make sure the product works correctly, so it seems like you end up in a loop of wet hair-add product-hair too wet-dry hair but remove product-rewet hair to add product-hair too wet-ad nauseum. If it’s okay to suck out some of the product to get your hair drier faster, doesn’t that imply you shouldn’t need that much product in the first place? Or that your hair doesn’t need to be that wet to add it in the first place?
You’re just gently plopping with the towel, not like scraping off product. If anything, the product gets more squished into the hair. Don’t overthink it.
Yes, some gets absorbed into the towel when you do that, but if it styles so much better, your question doesn’t really make sense. If all I need is, say 2/3 the product I’m using while raking and scrunching, but can’t distribute evenly and work with the smaller amount, I’m still better off using what works for the wet styling then absorbing some, along with a bunch of the water, off my hair with the cloth. Win-win.
Now - having said all that - I don’t always do the very wet styling. Sometimes I do blot the hair first then damp style it. Especially if I’m not washing it. And very often I do curl cream and leave in into very wet hair by raking & combing, for definition, then blot and scrunch pretty aggressively to take out water, then distribute gel gently throughout the hair, carefully, then a gentle scrunch and glaze the outer layer with gel.
Basically, if it works better I don’t think it’s a waste of product. You rinse shampoo off and right down the drain to get it to work right, so if you get better results styling with very wet hair and too much gel then squeezing some out, it’s a use not a waste. Just do whatever works best.