Employer plan to Roth rollovers… Can you make a tax free rollover if you have after-tax dollars?

I’ve seen alot of gnashing of teeth over this, and I’m not sure why. Here’s the issue. Someone has $90,000 of pre-tax dollars in a 401(k) plan, and $10,000 of nontaxable after-tax contributions. Can they simply take a distribution of the after-tax dollars, and roll them over into a Roth IRA tax free

Most say no, that any distribution from the 401(k) plan will consist of a pro-rata amount of pre-tax and after-tax dollars (90% taxable in the example above), with the taxable dollars then deemed rolled over first to the Roth, per IRC section 402(c)(2).

But no one seems to discuss IRC section 72(d)(2) which states: “For purposes of this section [section 72] employee contributions (and any income allocable thereto) under a defined contribution plan may be treated as a separate contract.” Plans that use section 72(d)(2) can distribute the employee’s after-tax dollars and earnings separately, without implicating the pre-tax dollars. While there will still be some taxable income upon a rollover to a Roth, because of the earnings component, this should be a much smaller tax hit for most employees. There wouldn’t seem to be any downside for a plan to use the separate contract rule, and many I dealt with in a prior life did in fact use it.