Apparently they do, from the article quoting the US Embassy:
Japanese Immigration officials are aware of the pattern of people staying for 80-90 days as “tourists,” spending a few days in Korea, Guam or some other nearby area and then seeking to re-enter Japan for another 90 days. Persons with such a travel pattern can expect to face questions at Japanese Immigration and may be denied entry with the suspicion that they have been or will work illegally in Japan. In that Japanese Immigration records are computerized, a “lost” passport does not serve to mask long stays in Japan.
I think it’s mostly for the visa runs, not the woking per se. (I would still not recommend it, especially not if you are planning on getting a permanent residence status later on.)
Well, EU prevents this kind of workaround by restricting stays to 90 days within 180 days period, so leaving EU for a couple of days after a stay of 90 days and coming back to stay another 90 days won't work, you will go over your quota.
I'm guessing your opinion is that western immigration policies, shall we say "unique" vs the rest of the world, are "sane". Maybe you're not aware on which side of the asylum walls you're standing.
Japanese Immigration officials are aware of the pattern of people staying for 80-90 days as “tourists,” spending a few days in Korea, Guam or some other nearby area and then seeking to re-enter Japan for another 90 days. Persons with such a travel pattern can expect to face questions at Japanese Immigration and may be denied entry with the suspicion that they have been or will work illegally in Japan. In that Japanese Immigration records are computerized, a “lost” passport does not serve to mask long stays in Japan.