Force_of_Nature/Tokyo PewPew: That's how i actually found this lol. I was in a match where i got a CB in that section and i said "wait, isn't that a ceiling?" and guess what i found, lol. And yeah, it does look pretty bad.
Well, it would force both players to take even more care of their position in this stage. These little corners and uneven walls due to the waste containers and barrels can already mess up wall slams / juggles a lot.
From a visual standpoint the glitch looks bad lol, but it's like this because Street is not classified as a "ceiling" stage. However, your idea of making that corner a ceiling section is interesting, though the opponent can get fucked up quite a bit if they're stuck in that corner too.
The launching throws thing is common in all the stages, the characters will teleport back a couple feet so they hav enough space to get the full animation off. Case in point as well is Bass' TFBB in a ceiling rom next to a wall, he will "float" backwards so the throwing animation completes itself.