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You keep confirming my low opinion:
In your 401k even under the present system you already have enough flexibility to invest in what in your opinion would be more profitable variant - either in that same 401k or in a rollover IRA. Thus the reinvestment and flexibility option till the final withdrawal you already have, and it does not count - it will be taxable for you, this way or that - either as an income at withdrawal, or as a sales tax at spending. The times of withdrawal and spending could be very close, so there need not be missed investment income - just imagine that you withdraw your 401/IRA funds at ATM in the supermarket in "as needed" amounts, like $40 at a time.
In reality it is a bit more complicated, but with judicious monthly withdrawals to fund the current spending one misses on average half a month worth of the investment return - and gains more than half a month worth of time if one pays estimated tax on the withdrawals at the last possible moment. Thus the spending money does have enough time to sit in the interest bearing senior checking account.