1) Higher quality with lower filesize. It makes life easier and better both when encoding and when sharing the final encode.
2) Avisynth is only 8bit per se ─ there are workarounds to work 16bit internally, but for your concerns, just load with ffvideosource. By default it'll convert to yv12 by itself ─ assuming you use 10bit 4:2:0 input and avisynth 2.5.8, that is. Though this isn't much of an issue generally, since you're supposed to edit with DVDs and BDs (which are always 8bit, as you know and stated in your post) and do the filtering yourself to bring it to a higher bitdepth if you want to. So having a 10bit source dithered to 8bit in avisynth is a "problem" (it really isn't) only for those that use downloaded footage, as far as AMVs go. And it's not like the industry has to use avisynth, they just throw around prores files if then want 10bit (or HDCAM SR tapes if need be, mostly for shipping to foreign countries), which will hardly need to be filtered.
3) In order to load 10bit in afx, you'll most likely have to resort to prores or other codecs used in professional environments, since I highly doubt it supports h.264 with bitdepth higher than 8 (and in fact, I'm not even too sure how well it fares with subsampling other than 4:2:0, when dealing with h.264 input). Save yourself the headache and import and edit at 8bit. Currently the playback setups on pc dither back to 8bit anyway, even if you technically would have the means to view 10bit videos. As I already stated, 10bit at the current time is mostly being employed as a filesize-saving commodity.
As a side note, I'll point out to
VapourSynth; it's still under development currently, so I don't suggest you to adopt it just yet, but keep in mind it's what we'll switch to in the future year or two, and that it has native support for varying bitdepths and other things.
