So this is basically a shortcut for (val.id || val.subItem.id)? But in which cases exactly do you need this?
From your changes to the docs, that's not entirely clear, so I would like a better description of this feature.
It's also not enough to change the existing tests, there should be new tests that make explicit what this feature does.

So this is basically a shortcut for (val.id || val.subItem.id)?

In the simple case, yes.

But in which cases exactly do you need this?

Here's a contrived example (note the id's don't match up).

$scope.items = [{
  id: 0,
  label: 'aLabel',
  subItem: { name: 'aSubItem', id: 1 }
}, {
  id: 1,
  label: 'bLabel',
  subItem: { name: 'bSubItem', id: 0 }
}];

$scope.selected = $scope.items[0].subItem;

If you use (val.id || val.subItem.id) here, the wrong object will be initially selected.

demo: https://plnkr.co/edit/8MQXJpRqEdtwF1hcCM3w?p=preview

edit: In my actual use case the track by expression was (item.valueOf() || item.subItem.valueOf()) and that wont work because all objects have that method.

@Narretz I noticed you put this in the Ice Box milestone and I don't want to invest more time into this if it's not going anywhere. I think that I presented a valid use case in my last comment, but if that's not the case, let me know so I don't waste my time.

@Narretz I've add a bit more to the documentation, but I'm not sure about the tests. Here's what it says above the tests I changed.

  /**
   * This behavior is broken and should probably be cleaned up later as track by and select as
   * aren't compatible.
   */

This is what the $value variable aims to fix. So it doesn't make sense to still have these tests using the hacky workaround. If I was going to add tests, they would be identical except for how the track by expression is written.