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Why not convert the TFP rate to represent the actual hourly rate? Instead of $168 X 730 X 1.13, simply convert $168 to $189 (168 x 1.13) and use that as an hourly rate. It's the same amount of money. It just seems unnecessary to have the extra step of converting to/from TFP. From the outside looking in it doesn't appear to serve any purpose that I can tell. It's not right or wrong, just weird.
My understanding is it's a leftover from when SWA first started and they were paid by the trip (TFP) from LUV to somewhere in TX, AUS I think. It was a flat fixed amount times how many 'trips' you did. I would think that by now it would be cumbersome for everybody concerned to hang on to that methodology. Hey, there's something to be said for tradition if that's what this really is all about. It's still weird.