IIRC, that whole clause was because cygwin's dll itself linked with libiberty, so the auto-detect stuff needed an override to make sure the right files were there when you build cygwin1.dll. Otherwise, it would detect that cygwin had strsignal, not build it, then fail later when cygwin1.dll couldn't find strsignal.
If cygwin no longer links with libiberty, that whole clause can probably go away now. As it's target-specific, I'm OK with letting the target maintainers have the last word about it, too.
