If all three of your assumptions are true, then you're correct. The trick is getting the second two assumptions to be true. Management and devs have to agree on a % time split, and management has to agree with intermingled priorities instead of "dev % goes at the end".

Negotiating those agreements is where having a common ground on business concerns helps. And yes, it sure does help when the managers can also see things from the dev's point of view too. In my experience, it's easier for devs to understand business concerns than the other way around, so that's the way I lean.