It's kind of useless, but not illegal. You won't be able to stat/open any of the files in the directory, although anybody can read their names. Putting a .txt on a directory name is also perfectly legal and still in bad form.

I agree the most likely explanation is accidentally putting the d in there in the editing process.

$ mkdir file.txt

$ ls -l

drwxr-xr-x 2 USER GROUP 4096 Nov 21 11:49 file.txt

$ chmod -xw file.txt

$ for i in {1..180}; do touch file.txt/long_name_$i; done

$ ls -l

dr--r--r-- 2 USER GROUP 12288 Nov 21 11:50 file.txt

File size is a bit off, but that's based on sector size and may be separately configurable - that's a bit beyond my knowledge.