A stop-loss converts an open-ended loss into a defined one. Setting it at the level that would prove the reasoning wrong, rather than at a round percentage, is what makes it an analytical decision rather than an arbitrary one.
It caps intent, not outcome. A stop becomes a market order once triggered, so a gap through the level is filled well beyond it, and stops resting at obvious prices are frequently swept before price returns into the range.
Stops placed too close are the most common self-inflicted wound in trading. Normal intraday noise takes out the position, price then proceeds in the expected direction, and the position size was simply too large for a stop wide enough to survive.