I don't think that's a true etymology of "bucket shop," which per my recollection of Livermore was just an off-track-betting parlor for ticker symbols, but where nobody actually bought the shares (bundled or otherwise). Strictly a retail swindle, having nothing directly to do with the risk/maturity bundling work you are criticizing above.
We had them in the US before the SEC, which regulated them
out of existence.
It’s likely the term is a pejorative referring to the Liverpool setup you describe.