My testing has revealed that the brake balance is only updated one in-game second after the last brake balance change input, and that one-second timer resets on every subsequent input before the change takes effect. This means that repeated changes will only be applied after waiting a full second without touching the brake balance.
I did the testing on mouse/keyboard, so I haven't checked whether keeping a wheel button pressed prevents updates, but at the very least, keyboard echo "presses" keep resetting the timer.

Now why is this a problem? In relatively normal scenarios, it is not - unless you're adjusting your brake balance into the braking zone and/or during trail braking. However, I have a different, specific use case: I'm using InSim to try and simulate a brake pressure limiter as found on the Clio Cup (for my Laurent Coil Cup mod). This limiter caps the pressure in the rear brakes to an adjustable 10-40 bar, while pressure in the front brakes can reach 100 bar.
To simulate this, I have to adjust the brake balance based on brake pedal input, and I have to make those adjustments quickly, so the brake torque in the rear wheels is properly capped. However, with the way brake balance updates currently work, this cannot work at all, as the "best case scenario" would be 100% brake input, which would only update the brake balance one second later, with any change in braking input disabling brake balance updates altogether. This basically means my limiter, which is supposed to help prevent rear wheels from locking up, actually forces them to lock up (since brake balance is 50/50 when brakes are not applied).

Here are reproduction steps for Scawen or anyone interested in checking brake balance behavior:

• Choose the XFR, as it's easier than some other cars to see the effect without spinning out.
  
• Make a setup with minimum brake strength, and set brake balance to 95%.
  
• Accelerate close to top speed (LA1 works best for this).
  
• Press and hold the left arrow key, so brake balance goes all the way down to 5%.
  
• Very important: keep pressing the left arrow key!
  
• Start braking: only the front wheels are braking.
  
• Release the left arrow key: after one second (2, 4 or 8 if you slow time down), only the rear wheels are braking.
  

You can also check the attached replay. As soon as I shift to 6th gear, I start decreasing brake balance to 5% (replays don't show this properly), I then start braking some time before crossing the road, and release the left arrow key as I cross it; exactly one second later, brake balance shifts to the rear wheels. The rest of the replay show a couple more abrupt changes, though there's no visual cue for those.

With all that said, unless it creates a problem of some sort, I would like to see brake balance changes apply immediately, as soon as the button is pressed, to allow for both my own InSim experiment to work, and people who do change brake bias mid-corner.

Maybe I'm wrong but that 1 second debounce time seems to be there to prevent exploits by creating scripts which would automatically adjust the brake balance in real time or very quickly based on the brake input, effectively giving an advantage over those who don't use it. Similarly, a clever program could analyze live OutSim data and adjust the them to counteract oversteer or understeer mid-corner.

While it is true it could be used to gain an advantage (adjusting brake balance in real time to optimize braking while minimizing lockups), as you say OutSim already allows for such cheating potential (but there's also non-OutSim cheating existing already with clutch macros and such).

However, I think it is also true that completely disabling brake balance updates for as long as some key/button press happens is wrong too, at the very least those updates should happen every second or so, instead of resetting the timer indefinitely. Also, the dashboard display (and F11 text) does update correctly, so it just feels wrong that the brake balance can stay at its previous value, potentially for several seconds before being properly updated.

On the other hand, it could be said that using OutSim to take advantage of the data could allow for some kind of ESP simulation - you won't get per-wheel authority, but you could adjust brake balance, brake strength and steering to get a somewhat decent ESP simulation.

In my case, for the brake pressure limiter, real time brake balance updates are a requirement, but it is of course a very specific need - still, one that would be really nice to bring the mod that bit closer to its real life counterpart.