It looks like the excursion through which the behaviour is linear is indeed ±0.7mm. Also nothing is said about it in the copy like what is said about the 3" inverted dome you refer to, where Madisound calls it the best sounding 3" driver that they're aware of. Perhaps this driver sounds really nasty - worse than the specs and response curve would suggest - there must be some reason for the blow-out price.
It's just that I had a revelatory experience, which is still fresh in my mind, years ago with a line array of 9 Philips drivers of very similar spec (AD5061M8s) but with lower sensitivity if I remember. They were mounted in what was called a "tapered tunnel reflex" - a short folded transmission line, from some perspectives. Imagine a TL in an "S" configuration, about 14" high and 14" deep with about 4" of internal width. The 4'1/2" driver goes in the top of the baffle. Now, flop it on its side and multiply it 9 times, vertically. This gives a line array with 9 drivers in a vertical line near one edge. I made it for a P.A. column for a small time singer as a gift. When we took it into the music shop to choose a suitable powered mixing board and the sales rep plugged a mic in and said "check, check - test, one two", he uttered an expletive and the tech came trotting out from the service department at the rear to find out what had produced that sound, they sounded that good - and unusual - on voice. It was the first time I had the experience of turning up the volume and having the speaker sound "bigger", not "louder".
Anyway, for less than $100 for the 18 drivers, I am tempted to give it a shot, but you may be right, and this may well be wrong-headed!
I just found this in a search for the driver, so maybe they were more special than I had allowed for...
..."The Rectilinear III used the Philips AD5061M8 full range driver as the midrange.This 5 1/4" cloth edged, paper coned driver had not only a whizzer but a copper cap on the magnet to improve the high frequency response.It was also used by Infinity,Genesis, and Dahlquist(among others).....They were very natural sounding in the midrange.The only speaker near their price range that sounded better on acoustic guitar was the original Quad electrostat (in the early 70's). I wish I could find a case of these midrange drivers somewhere."...