I think that while bf% is a much better predictor of health in general (especially for those folks who regularly exercise), BMI’s useful for the extremities. For example, if someone was extremely underweight but relatively lean due to a massive deficit I'd still feel it were a good idea for them to gain weight despite some inevitable gaining fat. Then they could reduce that by gaining muscle once they’d reached a healthier BMI.
In terms of fitness and body composition, your best guide is the mirror, hell no to the scales. In terms of health, not so sure. It's possible to be lean (as opposed to skinny) from a crappy diet that leaves you malnourished if it keeps you at a deficit and is still high-protein, but I wouldn't call that healthy. Likewise someone could eat well but not exercise, they'd be healthy by getting all their necessary macros but not physically fit and thus still have a higher bf%. Also you can be fit but not healthy due to high levels of stress etc.
I definitely feel there’s more to a healthy lifestyle in adolescents and young adults than pure vanity. No good fitting into a size 8 if you’ve failed to respect your body and it’s left you feeling lethargic and so unfit you can’t enjoy it to its full potential-as so many young women end up doing with crash-diets, sadly. At the same time I think there's still a lot of body fascism going on which give people distorted ideas of what is actually good health and fitness. Being healthy and in pretty good shape, and being in athletic condition, are two entirely different kettles of fish.