In our old Ford station wagon coming down the mountain from the ski area near Wenatchee, FULLY loaded, the brakes would overheat, even with downshifting teh automatic (within reason) and I would have to pull over to let them cool.

Your Prius brakes aren't likely to EVER approach that point (Pike's Peak maybe..??) by that is an example of what "B" mode might be used for. But for the Prius that is yet another matter of importance. If the hybrid battery, by happenstance, is alreay fully charged and you have a long downhill drive ahead of you then "B" mode is appropreate for use along with the frictional braking you will undoubtedly be using.

But yes, when frictional braking is used, ANYTIME frictional braking is being used, you might be "wasting" energy that could otherwise be recovered for charging the hybrid battery. So the same is true of "B" mode, engine compression braking.

"B" mode could be made even more efficient, a HIGHER level of engine compression braking, if you could somehow open the throttle plate but without the fuel injectors powered.

Your ICE becomes one HUGE air compressor.