I think you're using it wrong. In everyday driving, using it as a braking assist is completely pointless, reduces the amount of charging, might be deceptive if you've got a tailgater following too close (brake lights come on late), and it's just putting wear-and-tear on the shifter. The simplest and most effective braking strategy in every day driving, is to use the brake. On the other hand, If you've got a hill, not just a short hill, a hill long enough that the battery charge display goes all the way to the top, and there's still a long ways to go before you're at the bottom, that's the time to use B, and start using it early, near the top of the hill. The idea is to avoid the car getting to the point that it'll stop using regen, throw all the braking onto the friction brakes, in a scenario where there's still a long downhill ahead of you. FWIW, I've never seen the HSI display show no charging, even coming down a local ski mountain. I did use B coming down, but it's a biggie. I kinda agree, it does sound pretty harsh. I suspect hills are tough on the Prius, especially long ones. Going up or down. I try to avoid them as much as practical.
Yes, it rotates rapidly to consume energy, I try to warn new users that it will startle them, as the harder you press the brake pedal, the louder it gets. the computers will not let it damage itself. The cells are packed tightly into the tray, with some small room to flow air. If a cell bulges, it presses on cells around it. Catastrophic bulging looks like this. By slowing the charging rate to the battery, you lower the temperature and bulging. So where there is long downhill in high heat, use B and put up with the noise.
Going a little slower helps too I think, with the engine rev up. When I come down our local ski mountain, the slope will sometimes flatten out. As soon as I don't need to brake, even may need gas, I switch back to D, then back to B when it get's steeper again.