Yes, it’s less precise than 32-bit float (duh).
However, half float is more than adequate for photography - you get approx. 30 stops of dynamic range (good luck representing anything more than 16 stops with uint16) and constant quantization per stop (agreed limited). The quantization error is still smaller than the photon shot noise. As @agriggio points out, there is no need to represent every single integer in highlights because those measurements are noisy anyway (see e.g. why NEF lossy compression works).
Caveat emptor: half float is supposed to be a storage format. If you do many round trips of demanding processing on the intermediate half float data, then I guess there is some small risk the quantization errors might start accumulating… VFX industry (OpenEXR) doesn’t seem to have a problem with it though…