Good lord. The old behavior was perfectly fine. This new behavior is just plain awful - nowhere else in MAME is the default option for something a null string (-video none, for instance). I'll have to see if I can override in OSD.
Or you could just fix it right in baseline. I'm not particularly attached to AA's approach (he took the original bug report a bit too literally). I agree we should warn (not error) if the specified BIOS isn't found; but as long as there is a default to fall back on, that's what we should do.
Regarding the empty string, the same applies to -playback and -record, actually. But again I wouldn't object to keeping 'default' as a keyword meaning, well, 'default'.