I personally hate that naming scheme, it's confusing and produces long, hard to remember and typo-prone hostnames.
NS records exist for a reason. Your example could just as easily be:
Since every Windows network (and that tends to be where I see domain names like that) is a real DNS domain, there's no reason you couldn't do this. This has the added benefit of being able to push a DNS search domain based on the location of the computer doing the DHCP request, then having certain hosts that are replicated in each area subdomain, for example a CMS or a DB. Does sydwindb002 replicate to nycwindb002? Have windb002.syd replicate to windb002.nyc (and vice versa) then let users just put in windb002, and traveling users will be able to automagically use the closest and probably fastest DB server.
Or, in the case of a CMS, have one top-level CMS that refers to local ones. Say you have cms.example.com and cms.xxx.example.com. Depending on your network location, typing in CMS will either take you to the top-level CMS or the local one, which might aggregate data from the top-level one.