This rule is not unenforceable, impractical, or absurd. The line of play is very tangible and easy to estimate in the best judgement of the group.
We all know that the line of play isn't tangible. It is easily determined if the basket is visible, but that doesn't mean it is visible to all players. It is very difficult and perhaps impossible to estimate in cases where the pin can't be seen. Your last point requires there be a group, and that the group agrees on something that may be difficult or impossible to determine.
I'll give examples for my claims. These aren't wild hypotheticals. I've seen each situation more than once or can think of specific holes where they could occur.
I) Impractical.
A) You are playing a course for the first time. There are plenty of times where not only can you not see the basket you really have no idea where it is. However you always have a sense for the general direction of play given such things as the tee and fairway positions. Note that many posters here have been adamant that you cannot use the general direction of play (always known) you can only use the true line of play (frequently unknowable). The true line of play also requires knowing in advance what things look like on the other side of mandos, obstacles, and doglegs. The game however is very reasonably played without this knowledge. Plenty of times I play my disc forward with the presumption that after advancing a shot or two the exact location of the basket will become known. It is impractical to suggest that if I need to relocate my disc a foot or two I should walk ahead a hundred feet or more, and back, just to try to determine the exact location of the basket relative to where my disc is lying.
B) You know the course and it is one of those with multiple pin locations. Some are on the left side of the fairway and some on the right. Because they get moved around standing on the tee you don't know which spot it's in. If I need to relocate a foot or two it's impractical to require I walk 50 feet ahead up a short steep hill, and back, to determine the exact pin placement when the next shot is intended to just go up the hill and land in the middle of the fairway. Particularly so when I can see a couple back on the tee waiting. That is self indulgent and bordering on rude to make them wait while I do that.
C) Your opponent has a small ridge blocking his view to the pin. You decide to call him for relocating improperly and force him back onto LOP. So he says you'll have to move to the top of the ridge and help him line up. Which requires you to go move into the middle of a briar thicket.
II) Unenforceable
A) We've already said if you can't see the pin you really have no way to enforce true line of play.
B) You decide to make a "best effort". So you send your buddy or your opponent ahead to scout around for the pin and yell back. "OK I got it". "Great, which way should I move to be on LOP?" "How the f should I know, I can't see you". Geniuses.
C) You shouldn't have to trust your opponent but you shouldn't have to hawk monitor him either. Everyone has thrown and advanced to their discs. One guy needs to relocate. You cannot tell if he has done it correctly from your spot 40 feet away, you have to be colinear with him. Maybe he should really be in that pit instead of just to the side of it? You don't know. But you could easily judge "nearest no closer " because we have already said you always know in general the direction of advance so you can plainly see if he has stepped forward. Since "nearest no closer" allows for some lateral deviation along an arc there is no cause to argue whether he should be in the pit or just next to it, the two spots are the same distance away.
D) You have a small ridge blocking your view to the pin. You decide to call for your opponent's help in relocating properly along LOP. Since you have to move your lie he has to move to the top of the ridge to get colinear. Which requires him to go move into the middle of a briar thicket or stand under a hornet's nest etc. Unless you march to a different goose step or are part of a fraternity hazing you cannot force another human being to do idiotic things like this.
III) Absurd
A) We've already said that you aren't meant to be penalized for casual water therefore taking any type of penalty is absurd. Another poster has noted that the rule on relocation was previously worded to allow for that. Q.E.D. Game, set, match. "Spalding" imprinted in reverse outline on a face as the ball bounds away. Etc.
B) Some posters have said to escape a penalty you should throw from the bog. I once had a disc settle near a split rail fence guarding a drop off. I told my playing group taking a stance would require me to place my foot partially under the rail next to the drop off and asked what my options were. The immediate answer was you are never required to do something that would risk your health so move the lie to a place where you can safely take a stance and then make your throw. It is absurd to risk an ankle or knee injury from slipping while playing with a frisbee in the name of not deviating from LOP.
C) Consider the OP scenario but you are playing with your gf, wife, or kid and it was their disc that went in the water. Are you really going to force them to stand in a mud hole, go back 100 yards in a straight line, or go back to the tee and throw again with a penalty stroke? Seriously? "Honey why don't I just stand on that dry spot where you just fished my disc out from which is a couple feet away but no closer?" "Well because ... well you see ... well even though I spent 3 minutes doing this so you could keep your feet dry and I could keep my feet dry the rule says you have to walk out there into that bog and get your feet muddy". "Honey, that's absurd."