1) There may be a development situation where it is advantageous to know a passed-in path, segment, etc., is invalid (e.g., due to bad index value, character used, etc.) vs. a bad usage of the factory, such as trying to convert a Boolean value into a Date.
2) Non-ValueFactories classes that interact with the ValueFactories, such as BasicName, will need to throw IllegalArgumentException anyway when an invalid name is passed in, meaning the ValueFactories that interact with it would need to catch the IAE and re-throw as a ValueFormatException.