It does show the placeholder. Unless it has changed recently?
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Yep, just tested it... and it does show placeholder. But only if they enter one, and when entering the observation it asks if you want to add the name as a placeholder, so maybe the majority of people say “no “ to that, or just don’t bother even trying to put something.
If iNaturalist plans to continue letting observers type in "placeholders" these placeholders should replace "Unknown" when the photo is displayed for identification. They are usually helpful. Otherwise, if placeholders serve no real purpose, maybe get rid of the placeholder option.
PS: It would also be helpful if the pop-ups in Identify showed at least the first few words of any comments the observer included. Thanks.