Where I agree that using Guide mode off your belay loop is not the best idea/technique, there are some scenarios where it can be beneficial.
In their new book, "The Montainguide Manual", Marc Chauvin and Rob Coppolillo describe a scenario on pages 287-288 (assisting a climber at the crux) where they belay off their belay loop in guide mode.
The probability of this scenario occurring is small, but it does call for using Guide mode off the belay loop.
To summarize:
On a multi-pitch climb, 2nd is stuck at the crux.
Rather than trying to assist/haul him pass the crux (3:1 haul),the belayer decides to counter balance rappel down to 2nd to talk him through the crux. Not pressed for time, both agree that the 2nd. wants to climb the crux, rather than be rescued/assisted.
At the crux, the rappeller converts his rappel device to guide mode by clipping the "nose" of the device to his belay loop. At this point it is a top rope belay, belaying through guide mode (in guide mode the device would "lock up" effectively closing the system). On the short distance to get through the crux, the additional friction of pulling the rope through guide mode is an acceptable tradeoff to get a closed system.
After the 2nd pulls the crux, the belayer puts a foot Prussic above the guide mode device and ascends back to anchor and puts 2nd. back into normal belay mode to finish the pitch.
Where this seems like a guide/client technique only, it can/may prove to be a useful tool/technique for the recreational trad climber as well.