For Matter Fabs (Mk1) the actual production time appears to be about 2s, even though they list 1s. I was operating on the idea that the Mk2s were denser, but more costly to run, so the idea that the Mk1s were 1s made sense to me (so a farm of Mk1s made more matter but took up tons of space). If they are supposed to be 2s, then I guess they're useless as soon as you can build the bigger brothers. Is that the intention?

Yes this is intentional.
They are slower and about 25% less efficient. Might be still too late game with easy recipes compared to Mk2.