Thanks for all the feedback guys! As clear from the above, the packing algorithm used in the progressive lightmapper has a lot of issues. It needs work and over the last year this work has been postponed due to other problems that for various reasons have been deemed more important.
Unity 2019.1 will have a minor new packing feature and that is “Limit Lightmap Count”, the ability to set a max number of lightmaps to be used for a certain group of objects. This feature is currently in the polishing phase, and once it is done, I will focus on addressing the issues mentioned in this thread.
I cannot guarantee anything, but on my radar right now is:
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Improve texture utilization (i.e. avoiding space waste).
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Avoid texel bleeding/overlap.
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An option to pass-through UVs unaltered (as requested by @JamesArndt1 ).
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Spatially coherent packing as shown [here]( Progressive CPU Lightmapper page-15#post-3777937).
Do note that none of these changes are trivial and it will take some time to get right. Thanks!