1/16" over 12" inches is 0.5%, not .05%, or put differently, a ratio of 0.005 to 1. For 9-speed and less do you mean 0.75%? I've always used half a percent as the wear threshold even back to the old days of 5-speed cassettes. That said, I don't think it makes much difference since these wear limits involve at least some amount of subjective preference.
The point is to replace the chain before it begins to accelerate wear on the rest of the drivetrain. Yet all the parts of the drivetrain are consumables that are always wearing even new. Do you want to replace the chain at 0.75% instead of 0.5%? If so you'll buy chains less often but your cassette or chainring might only last 3 chains instead of 4. There's nothing "wrong" with either choice.
