What part of less than 50% of submitted papers get published do you not understand? If it doesn't get accepted it never goes to the press.
As you mentioned you can put these submitted papers under research (thus you will
receive credit for a paper, that is what really matters right?) why put it under PUBLICATIONS?
Publications means that it is printed. Get it? There is no gray area? It is not appropriate to put "submitted" papers under PUBLICATIONS because it hasn't been published.
As for your comment about misrepresenting, You need to look up the word Misrepresent in a dictionary. You are confusing it with the word FABRICATE.
Bottomline: The PDs go by my definition of Publication and they will read your "submitted" paper with skepticism. There is a reason there are TWO sections (Reseach and Publiciations). You can keep arguing until your face turns blue or you develop carpal tunnel. The fact is that anyone that posts "submitted" papers under PUBLICATIONS rather than under Research is taking a RISK. Why take the risk? Do you think a PD will think less of your reseach because it is in the "research" section rather than the publication section?
You will receive credit for your paper under the heading "Research" so why misrepresent? It is that simple.
PDs scrutinize applications to separate people. Don't take a risk. It is not worth it.