sure seems like this could just as easily be used to perform on-orbit disassembly of a hostile nation's satellite?

Yes, China demonstrated this capability a couple year ago with towing a geo sat to a different orbit. It only makes sense to go tit-for-tat on these capabilities for servicing and the unspoken offensive ability.

https://spacenews.com/chinas-orbital-maneuvers-blur-the-line...

Absolutely, although it's a different ball of wax if you're trying to do RPO of this complexity with an adversarial body.

I would think there are much less expensive and more rapid methods of "on-orbit disassembly" than a system like this?

> on-orbit disassembly of a hostile nation's satellite?

Too complicated for disassembly. But totally valid for modification.