That's a bug on code that handles leap second. It's not a bug triggered by losing accuracy by ignoring leap seconds.

I'm also very curious about what kind of applications will fail if the kernel simply ignored leap seconds, and let the clock get a second out of sync.

A computer does not last for long enough for leap seconds to add to anything. I'm unable to come out with any hypothetical use case where that small difference is relevant, but specialized hardware and software to deal with the issue are not necessary.