sourceIt isn’t a particularly good deal to just contribute after-tax money, UNLESS you can then get that money out and convert it to a Roth.
However, the rollover amount includes whatever earnings were gained during the time contributions were made to the Roth 401(k). Typically these are small if done periodically and kept in cash-equivalents. Also, one can direct those amounts to a traditional IRA, though that interfaces with the conventional backdoor Roth's goal of being tax free on the conversion. One can alternatively send the earnings into the Roth IRA, but must pay tax on the earnings at the marginal rate. The amounts are small, but non-zero.
Another casualty of the conversion from the after-tax Roth 401(k) to a Roth IRA is that one loses access to the exemption from the 10% penalty on unqualified distributions if one retires during or after the year of reaching age 55. Withdrawals are not qualified from the Roth IRA before age 59.5, but 401(k) plans enjoy a 55+ exception if you are separated from the employer sponsoring the plan in or after the year you become 55.
So, my question: assuming that one has access to portfolio-compatible, low expense funds in the Roth 401(k), why not leave the money in the plan at least until distributions become qualified? My megacorp offers institutional Vanguard funds at super low expense ratios and also offers an in-plan brokerage account option. I would pay no rollover-associated tax, I wouldn't need to hide out in cash (read: can be invested in alignment with my IPS from the moment the Roth 401(k) dollars arrive in the plan) until the rollover. And I'd have access to the plan money without penalty if I separate at age 55+. (note: separating before age 55 and then reaching age 55 is not enough!) I'd also be able to take loans against the 401(k), which I cannot do with a Roth IRA.
What is the purpose of adding in the rollover? It seems like it would introduce: a small, but nonzero high marginal tax hit; some paperwork annoyances; loss of loan-taking ability; and loss of the 55+ exemption on qualified withdrawals.