Bearcat.
You're correct, you have seen it because it is an OK thing. HDG SEL has a limit of 25' if so selected, or at slow speed in auto. However, LNAV has a limit of 30' and will use it do get the task done if necessary. This could be at any time, such as route capturing or route modification at altitude.
What I do not remember seeing is a hold turn taking 60secs to complete. It is always about 80-90 secs. The rate one theory is therefore not applied.