Xjyuk

Pathfinder draws a strict distinction between unarmed attacks and weapons. Does this distinction invalidate the benefits of the "Finesse" trait, when applied to unarmed attacks?

Almost all characters start out trained in unarmed attacks. You can Strike with your fist or another body part, calculating your attack and damage rolls in the same way you would with a weapon. Unarmed attacks can belong to a weapon group (page 280), and they might have weapon traits (page 282). However, unarmed attacks aren’t weapons, and effects and abilities that work with weapons never work with unarmed attacks unless they specifically say so. p.278

This rule says that weapon traits can apply to unarmed attacks, but that only things which explicitly say they work with unarmed attacks can apply. Now, look at the text of the Finesse trait:

Finesse: You can use your Dexterity modifier instead of your Strength modifier on attack rolls using this melee weapon. You still use your Strength modifier when calculating damage. p.282

So on one hand, we can apply the Finesse trait to unarmed attacks, but when we apply it, we find that its mechanical benefits apply only to melee weapons, and not to unarmed attacks.

So from my reading, this means that any additional rules which apply to the Finesse trait, would also apply to unarmed attacks. However, unarmed attacks would not be able to substitute Dexterity for Strength on attack rolls, because the Finesse trait explicitly says that only "melee weapons" gain this benefit, and not "unarmed attacks". Is this a correct reading, according to the rules as written?

“Finesse” trait is compatible with unarmed attacks

Page 286 on the manual, under "weapon traits" says:

Any trait that refers to a “weapon” can also apply to an unarmed
attack that has that trait.

And unarmed attacks are listed as having the finesse trait in the table in the same page.

By the strictest of RAW, you might be right. Numerous places in the PHB refer to "weapon and unarmed strikes" but Finesse lacks that language...

More likely, this was an oversight based on the language in your quote being perceived as having covered the issue already.

Unarmed strikes can benefit from any applicable weapon trait.

Specifically, the line you quote is

Unarmed attacks ... might have weapon traits(page 282).

The "effects and abilities" is intended to cover other things, such as class abilities and Feats. For instance, the 10th level Cleric Feat Castigating Weapon explicitly works with unarmed strikes (as do most Barbarian abilities), but the Fighter ability Power Attack requires you to be wielding a weapon because it does not include an unarmed option.