I did find some older Danfoss VLT model for drives with bypass had 30 HP IEC contactor on the M1 input contactor that feeds 40 HP drives . The M2 output & M3 bypass both were 40 HP drives. Tech that performed our start ups did not no about this. Both of the 30 & 40 HP made in Italy GE IEC contacors were both the exact same size. Tech thought that being the M1 input contactor always had a low in rush current especially on drives that had start ramp times above 10 seconds could get by with a smaller size. Anyway the M2 IEC garbage contactor went bad at least twenty times more often then the M1 input or seldom used M3 bypass contactor. Every time we did our monthly ATS testing in a large research building with older VFD'S with bypasses I had to replace at least one of the M2 garbage IEC contactors. Most of these drives ran 24/7 and all had long ramp up times so one would think.that a contactor that has only been shut off less then 200 times during its 6 to 8 year life would last a lot longer. All were in clean cool enviroment except for maybe 25 in a basement chiller & pump room whose temperature was in the high 80's summer months.I don't know where you get the idea IEC contactors are garbage. I have literally put tens of thousands of them in my designs over the years. I cannot recall having a single one fail in normal use. It is true that you cannot replace the contacts on them. But it is generally cheaper to replace an IEC contactor than it is to replace a contact on a NEMA starter. And usually much quicker to do so.
There are also a lot of nifty doodads you can get with them that make them a whole lot easier to use in groups.
And you cannot beat the space-saving.
It is also true that you have to think a little bit about what you're doing and maybe upsize them sometimes. But the vast majority of applications that's just not necessary.
Like anything I suppose there are differences in quality between different brands, and maybe you just got someone who misapplied them. I can't imagine why a bypass application for a VFD would ever fail since it will not close or open with a load on unless the VFD fails.