Redneck, the feature you describe was indeed silly and impractical, but the Type 99 Rifle (to give its official name) was a sound enough weapon on its own. The info I have indicates that the folding anti-aircraft sight was probably meant as more of a psychological boost for the Japanese soldier - right along with the ridiculous wire monopod that was supposed to help in aiming the rifle in the anti-aircraft mode.
Undoubtedly, one or ten rifles would have been no threat against anything except a static balloon, but can you imagine and entire company firing at once (presuming you could get them to all aim at the same point and fire together). Might have been a whole 5 to 10% change of a near miss
I'd rather be a Soldier with a mule and mountain gun, than Knight of old, with spurs of gold, or Roman, Greek or Hun. For when there's trouble brewing, they always send for me!
Mortui Non Mordent - Celeritas Et Accuratio