What advantages are there to painting the inside of the block?

Yes. But they're out of business now.
This was built by RHS (sister company to Comp Cams) around 1988. I head the heads redone around 1990. Here's how it looked when I sold the block around 2013.
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I'd say it held up pretty well.
However...

Excellent questions. I'll say that if I had been given a choice, I would have traded the glyptol for time spent removing all that flashing. That might have improved oil return.
I remember RHS. Racing Head Service. I always thought it sounded like a speed ******* company.