Am I misunderstanding steady state power disspation calculations?
There is probably a thermal limit for a temperature gradient due to coefficients of expansion of conductor and epoxy insulator from a 64'C rise from leads to junction in an infinite heatsink that limit this specification.  This is their safe limit for mechanical stress.

The key words are "infinite heatsink" so thermal resistant Rjl junction to lead applies.  This could be an oil tank in theory.  But in practical terms a design could provide a chassis clamp around the body that will add thermal resistance and thus Pmax derating.

This heatsink Rca would be added to the
\$R_{θJL}=\$ 8'C/W then *8W=64'C rise plus an ambient spec range must limit this rating.  

Although the Tmax is 175'C absolute max, this would affect life expectancy, so a part rated for reasonable MTBF will provide a rated Pmax. for reliable operation.

You may apply this logic to answer your other questions.