In the US it has to be at least 51% real cheese, and the FDA doesn't allow them to be called cheese.

I'm sorry, but once you blend it up with over 50% other stuff, it's no longer cheese. For example, we call some better concoctions made with cheese "cheese spread". American cheese itself has a lot of varying quality, some is largely cheese mixed with other dairy products and emulsifiers. Others, like Kraft Singles, are largely artificial.

We should absolutely limit naming in order to protect proper, traditional processes like those used in cheese making. Processes which produce healthier products, that don't rely on approximations of nutrient content, while missing out on lesser nutrients that we might not understand yet. Unfortunately, ultraprocessed foods have become so normalized, that most people seem to read right through the labels and ignore the fact that they're eating largely artificial foods.

I can see the benefit of a more lightly processed American cheese in melting applications. I prefer using melty cheeses like Muenster or Danish Fontina on things like burgers, or a richer cheese combined with a touch of sodium citrate to aid melting in others like soups. But some folks will even use a slice or two of American cheese along with a better cheese, in place of sodium citrate.