This isn't "practice." It's rehearsal. Different thing. Practicing musical content (new or old) to increase and retain musical skill is one thing; getting ready for "the gig" is another.
I practice music because I want to maintain and develop my skill as a lifelong musician. That's pretty much the most important reason I can think of for *anybody* to practice.
Rehearsing by playing music you already know in a manner -- alone or with others -- that helps ensure you'll be an entertaining musician to listen to and watch, is very important, but I don't really think of it as "practice."
Maybe I'm splitting hairs, but I don't think so. They are different concepts.
I understand your point. My perspective has been that anything I do at home is practice, and anything I do with the band is rehearsal.
As part of my review of the setlist, I'm currently attempting to learn all the lyrics from memory and be able to back anyone up. Playing and singing is one of the hardest things I've done musically, especially since I don't have the greatest voice.