Yeah, it only kicks in if they themselves get hacked, not individual user accounts:
Please note that the insurance policy covers any losses resulting from a breach of Coinbases physical security, cyber security, or by employee theft. This insurance policy does not cover any losses resulting from the compromise of your individual Coinbase account. It is your responsibility to use a strong password and maintain control of all login credentials you use to access Coinbase.
There seems to be at least one documented case of a Coinbase refund:
It was 10.6 bitcoins held in the wallet service Coinbase, the most well-funded and widely implemented service on the market. Jeff, who asked that we not use his last name, got the news of the transaction as soon as it happened, and after going back and forth with a customer-service representative, he had his money refunded. Exactly one month later, it happened again.
But yeah "compromise of your account" could be spun into different ways. Insurance is nice, but I still wouldn't rely on it.
So coinbase just wanted to say that their centralized service guarantees refund in case of being hacked.
There are 2 more similar cases on your link and one of them was denied because a user didn't use 2fa. The amount of positive cases is miserably low while comparing to banks people have more responsibilities related to safety of their accounts.
If such things are not such user-friendly as we used to see it then we shouldn't expect fast and mass adoption.