Were the failing tests due to John/Jane's correctly coded changes, regressions, or bad code changes? The tests provide no meaningful insight into that - it's still ultimately up to the programmer to make that value judgement based on the understanding of what the code is supposed to do.
What happens is that John and Jane make a change, find the failing unit tests, and they deem the test failures as reasonable given the changes they were asked to make. They then change the tests to make them pass again. Again, the unit tests are providing no actual indication that their changes were the correct changes to make.
WRT the advantages:
1. "design your APIs before implementing them" - this only works out if we know our requirements ahead of time. Given our acknowledgement that these requirements are usually absent via Agile methodologies, this benefit typically vanishes with the first requirement change.
2. "makes it easier to keep productivity high for hours at a time" This tells me that we're rewarding the wrong thing: the creation of passing tests, not the creation of correct code. Those dopamine hits are pretty potent, agreed, but not useful.