You are suggesting that the dev playing helps them reinforce a certain playstyle that they are used and then only using that as a standard in order to iterate? In which case yes that is certainly a case that can happen, it is also something that even QA might get stuck into. But I do not agree that the devs playing their own game does nothing to help it. The very first iterations of a prototype would be something that the devs themself played in order to have any idea if the game is even feasible or fun. Later in the development process playing the game your self ensure that you can spot some obvious flaws (ofc with being human there will be blind spot which is why you bring in some other perspective to try new stuff)

Now with modern games being live service and such as your example were the iteration of endgame seems to be mostly in the balancing rather than trying more grand new features or other stuff or just removal of old stuff, I agree that the dev's own perspective starts being less useful.

Often times, it just makes them more certain in themselves that the player is wrong.

Is this not more the standard folly of man when they believe themself to be expert and loses all their humility? In which case i'm not sure that the devs playing the game itself is the flaw rather than the ego, they could just be declaring themself anointed without playing.