Seems like it applies to crafting only, like assembly machines and furnaces.

The quality module has a special effect, which increases the probability of getting higher quality results when crafting in a machine.

Which makes sense. That would be weird to mine "legendary" iron ore, but I can understand crafting a "legendary" iron plate, which is super finely crafted to high standards.

And I completely agree with you about leaving that tech for later. Especially that it seems to be super resource-wasteful to kick start. This alone should prevent new players from fiddling with it.