It's a decent, if uncommon, unit for human reactions. The difference between 0 and 1 seconds is a noticeably long time to wait for something, but the difference between n and n+1 milliseconds is too fine to be useful.
I mean, you probably cannot sense the difference in duration between 20 and 30 ms without special equipment.
But you can possibly sense the difference between 2 and 3 deciseconds (200 ms and 300 ms) after some practice.
I think the issue in this case was rather the retrofitting a boolean setting into a numerical setting.
At 120bpm a sixteenth note is 125ms, the difference is very obvious I would think
Several top players have multiple "perfect full combos" under their belt, where they hit every note in the song within 50ms of the target. I even have one myself on one of the easier songs in the game.