I get the vibe that it's more like there's unexpected complexity and it's difficult to be confident you know how zipcodes work with enough detail to make the feature work. And that is just one example of possible complexity.

Do zipcodes change for example? Can your drop-down quickly go out-of-date? You'd need a way to manually enter a city so people are able to tell the system an address. Do you want to bother making an auto-updating zipcode feature just for a form?

Is it going to confuse people because nobody else has bothered to make this superfancy selection feature thing?

Is this USA only? There are postal codes/zipcode-equivalents in other countries.

It starts to feel it's likely not worth the time and effort to try to be smart about this particular feature. At least not if I'm imagining this us some generic, universal address web form that is supposed to be usable for USA-sized areas.

To me it feels similar to that famous article about what you can and cannot assume about people's names; turns out they can be way more complicated and weird than one might assume.

Although maybe zipcodes don't really go that deep in complexity. But on the spot I would not dare to assume they are.

As long it does become a dropdown, fine.

But in TFA's example it does not (my zip has 3 possible city names; TFA's example shows only 1).

Even if a zip code contains multiple cities, each ZIP has one "preferred" locality name and you can default to that. Any of the locality names within a zip code is deliverable for all addresses in that zip code.

Indeed. I don't always even do the drop down just make it autofill a still editable text box