Sure there's some interest rate risk to short term treasuries but the real world risk rounds pretty close to zero. Plus it lessens as it matures.

In the current situation with the 3m at 5.125%, if you were the most unlucky investor in the world and bought it today, and the Fed immediately announced they're raising target rates by %1, and the market actually immediately responded with a commensurate %1 increase in the market rate, and you had to liquidate your position immediately for cash, you'd be down about 0.2375%.

A more realistic 25bps (i.e. .25%) rate hike would be .0605%. And again that's if it happens at exactly the moment after you've acquired the treasury. For every day that passes, the time to maturity shortens even further, so the current price impact to any interest rate change would lessen as well.

If you know you need the cash then yes keep it in a savings account. But if you're unsure, you could a lot worse than buying 3-month T-bills.

Oh, no argument there; it's about risk management in my mind. How often do financial emergencies happen? How often do I need to dip into long term savings? If I do have to dip into long term savings, how much of a haircut am I willing to take?

The answer to these questions are going to be different for each person and I obviously cannot answer them. What I'm trying to say is the money isn't wholly illiquid.