Yes, current convenion, as documented, is to use "tertiary" outside of larger cities (or mainly Tallinn) for national roads of type "kõrvalmaantee". See https://wiki.openstreetmap.org/wiki/Et:Key:highway

Changes here conflict this, and I think it needs to be undone.

There are various classifications in which the same road is classified differently. Hence we can't use the same "highway" value for road types of multiple classifications in the same area. Otherwise it is never clear which "highway" value should be used.

If necessary then possibly some new key other than "highway" can be introduced to store data about other classifications.

In which source is this particular road classified as "jaotustänav" anyway? I see that ETAK uses importance class named "jaotustänav" but apparently only in cities. So this is from some different municipal dataset?

Just in case, see also documentation for "highway=unclassified". This highway value does not mean that road class is yet to be determined: https://wiki.openstreetmap.org/wiki/Tag:highway=unclassified