Corner gives you a combination of the best turn rate and the minimum turn radius. At any speed above corner you're g limited and your radius increases because of the extra speed. Below corner you're lift limited and the airplane will stall before you can reach the g required for best rate and radius. You're right though, this is instantaneous turn rate, not sustained. Before getting too wrapped up about sustained turn rates, remember that sustained turns are level turns (edit: I'm talking about test report sustained turn rates, this is the number a chart will give you), something typically avoided in a fight unless you're trapped on the deck in a lufberry.
WWII fighters did not have sufficient power to sustain a turn at corner velocity with the nose level or above the horizon; however, nose low turns at corner can certainly be sustained, if only for the time the nose is low. Fights are typically not stabilized at a single speed but instead are a series of transients. Nose low accelerating to above corner, nose high decelerating to below corner. By "centering" your fight speed around corner you're getting better average performance.
The principle in a fight is to recognize where you are in the envelope in relation to the absolute best performance your aircraft can give you. For instance, let's say your corner velocity is 200mph. You come over the top of a loop with 80 and start down on the back side. Lots of guys will keep the throttle at max thinking the more speed they get with their nose down the better off they are. If they're getting ready to bug they'd be right, but if they intend to continue a looping fight they should actually throttle back and aim for corner velocity across the bottom to get the nose around quicker and minimize the vertical turn radius.
Let's say you're going nose down full bore and your speed builds to 300-350mph. Your relative turn radius and rate are horrible and as you blast along trying to keep from blacking out and thinking how cool it is that you've got all this speed you've just overshot your target's turn circle and he's just going to rudder over above you and dive on you from behind your wingline. Happens all the time.
Here's another example. You're at 500 ft nose down and 80 knots and you need to recover. Do you A) throttle back to keep yourself from accelerating into the ground or B) firewall the throttle and hit wep? The answer is B. You need to get to your best turn rate and minimum turn radius, i.e., corner and you need to accelerate to get there.
Again, I'd say that most people understand that getting too slow can be a problem but the big thing to takeaway about corner is that many people make the mistake of being far too fast. You think the extra speed is helping but it's not. I love guys who want to hit the merge going 400 or 450 mph. I'll hit the merge in a hurricane at about 300-325 and pull up and over hitting corner of 200 as I'm near the top of my loop. This puts me well inside his turn circle and behind his wingline. Since I'm just a bit below corner after coming over the top I just reverse, crank on a magic turn and I'm D200 dead six. Happens all the time.