More and more basic practical application scenarios have been gradually ignored/disregarded, in fundamental research on rechargeable batteries, e.g. assessing cycle life under various depths‐of‐discharge (DODs). Herein, although benefit from the additional energy density introduced by anionic redox, we critically revealed that lithium‐rich layered oxide (LRLO) cathodes present anomalously poor capacity retention at low‐DOD cycling, which is essentially different from typical layered cathodes (e.g. NCM), and pose a formidable impediment to the practical application of LRLO. We systemically demonstrated that DOD‐dependent capacity decay is induced by the anionic redox and accumulation of oxidized lattice oxygen (On‐). Upon low‐DOD cycling, the accumulation of On‐ and the persistent presence of vacancies in the transition metal (TM) layer intensified the in‐plane migration of TM, exacerbating the expansion of vacancy clusters, which further facilitated detrimental out‐of‐plane TM migration. As a result, the aggravated structural degradation of LRLO at low‐DOD impeded reversible Li+ intercalation, resulting in rapid capacity decay. Furthermore, prolonged accumulation of On‐ persistently corroded the electrode‐electrolyte interface, especially negative for pouch‐type full‐cells with the shuttle effect. Once the “double‐edged sword” effect of anionic redox being elucidated under practical condition, corresponding modification strategies/routes would become distinct for accelerating the practical application of LRLO.