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In CSS Rhythm level 1 the block-step-insert property has two values: margin and padding, to specify whether the space added in order to step everything to the step unit is margin or padding. https://drafts.csswg.org/css-rhythm/#block-step-insert
I can imagine a lot of user cases where instead the author would want the content box to grow — for images, for instance. (Then object-fit: cover could be applied to the image, creating a slight crop, to get the image box to beautifully be the right height that's an increment of the step unit. And there is no "extra space".)
I like margin-box and padding-box better as well — since we aren't really adding to the margin or padding. The margin and padding will still be what they are, defined by the author/UA. We are adding extra space into the margin box or the padding box. These values make that more clear.