Why does updating the description of a custom block not update the block title? When creating a custom block, an editor is required to complete a description field. The description is then used as the block title (if displayed), as well as being used also for admin purposes on the block layout page.

If the description is later changed, the block title does not update and to do so requires a separate action of also updating the block configuration.

This seems like bad UX and is very confusing for editors. 

Is there a valid reason for why blocks work like this?
There isn't really a reason, that's just how it works, the title of the block_content entity is an internal administrative title and while used as a suggestion for the initial block title, will then afterwards no longer have any effect on that.

You can place the same content block multiple times with different block titles.

While you think it's a bug, someone else might rely on it, it's not something that can be changed now, not by default anyway.