I'll add a correction to what you wrote:
"So Guest is really a strange name for "Can view Data Contributed by users and data about users (user data for short)".
It's just the opposite. Guest is a strange name for CANNOT view...
Though it does seem nonsensical and overly granular at face-value, we needed to err on the side of flexibility to satisfy users. If someone makes a student a guest who can't see private data, they have made a mistake and I correct it for them. We try to explain clearly what guest and limited access mean so that group admins use each appropriately, but occasionally, I do a little corrective intervention, which takes about 1 minute of my time. However, we cannot have fixed types because there are two access levels for students, although I agree that there are ways to improve what we currently have. As they are now, the Types are all the same for privileges (at least to me); the user does not see their "Type" and it is the user's access level that is important from a site wide perspective.
But yup, it's still more confusing than it ideally should be.
