I would talk with a Charles Schwab representative and double check that your employer is doing that correctly. They might not be unstanding your employers request. It doesn't sound like a good way of doing things either.

yes.

seperate accounting is required but the back end system counts in that regard. Their system will track it as if it's in seperate accounts.
All they have to do is be able to allocate the earnings to the appropriate money type and that's done pro-rata. 99% of the systems can do this.

ex: if you contribute $75 pretax and $50 in roth. It sits in cash and earns $1 of income. Did the pretax earn that income or did the roth? Of course it's split the same ratio of the deposit. Well, buying a stock works same way. Now take that $126 and use part of it to buy 1 share of Boeing at 88. You now have $88 in Boeing and $38 in cash. The ratio remains the same 60% of the Boeing or 52.8 is pretax and 40% or 35.20 is Roth. And the remaining cash is split 60/40 as well. As you add new dollars in the ratio changes even on pre-existing purchases. That's how their able to track it.

IRS fully buys off on this methodology of recordkeeping and in fact dictated this way of doing it long ago when they allowed after-tax contributions to be put into 401ks.