Is Cube MX generated HAL code used in development for production? Or is it better to write code from scratch for a product?

Whatever you do you're going to have to thoroughly test the code, and customize it to your specific application.

CubeMX can provide a framework, but you'll need to handle errors and recovery, rather than die in some while(1) loop.

I can see the pin allocation and initialization to be useful, but its not going to make anyone a "better" developer.

Almost 90% of them can be used, or used as base with some small modifications - it depends on your needs. We do the same and everything works without any problem.