awpincus: part of the ambiguity comes from wacky rules the agency imposes on us. In a common sense world, if I put you on the runway (LUAW) with a 737 on a 3 mile final, I'd tell the 737 that traffic is lining up on the runway and will depart when he reaches a 2 mile final, or something like that. And I'd tell you, when I put you on the rwy, expect further clearance when the 737 is 2 mile final, or something like that. This way you'd all know what's gonna happen; you'd take the rwy knowing exactly what my intentions are, and the 737 would also know my intentions.
But this ain't the common sense world; it's the FAA world. And they mandate to me that I say "B737, cleared to land, traffic holding in position." Think about that - it sounds stupid. Why would he be cleared to land with traffic HOLDING on the rwy? But that's how we are supposed to say it. And if that b737 is cleared to land, I'm supposed to say to you, "LUAW, traffic 3 mile final" (as opposed to how I'd like to put it, in my example). Now someone could say I'm not prevented from adding the phraseology in my example. True, I'm not. I can add it to the required gibberish. But know what? I only have so much time, so I do what's required, even if I think it sounds silly. And I think it adds to the confusion evident in your post. But they make the rules, not me.