To me this seems great and even humble. As RAM is dirt-cheap this can significantly improve performance (especially when external or a remotes drives are involved and not only NVMe SSDs), also prolong SSDs life (which means saving not just money but also the hassle of replacing them, money as well though - when it's a Mac and you can't just replace the SSD).
I wish I could configure Windows the same way: whenever it can use RAM to avoid an extra disk write/read - it should.
In the case you describe it may indeed decrease the performance (or may not, I'm not a disk I/O or caching expert and know the things can be weird) but still may increase it in some scenarios. Copying files from one physical disk drive to another is not the only kind of operation in which RAM cache of disk I/O is involved.
I wish I could configure Windows the same way: whenever it can use RAM to avoid an extra disk write/read - it should.