Why is /e/ generally transcribed as 'ay'?

I’ve seen pretty often in phonetic transcriptions for English speakers who weren’t familiar with the IPA the phoneme /e/ or /ɛ/ transcribed as ay:

Here "lejos" (/'le.xos/) is transcribed as lay-hoss¹.

Here "te" and "menos" (/te/ and /'me.nos/) are transcribed as tay and may-nohs.

This seems to be a pretty common spelling for the sound ‘eh’, which I find really baffling since the spelling ‘ay’ is generally pronounced either as /eɪ/ or occasionally /aɪ/, but rarely is it pronounced as /e/ or /ɛ/. Consider:

• /eɪ/: day, bay, may, play, away, always, bayonet.
• /aɪ/: cayenne, Uruguay.

The only instance I can think of ay being pronounced as /ɛ/ is in says, which I consider a somewhat exceptional pronunciation.

So why is it that /e/ is generally transcribed as ‘ay’? Wouldn’t it make much more sense to transcribe it as ‘eh’?

Do native English speakers instinctively pronounce ‘eh’ when they read ‘ay’ in phonetic transcriptions? In other words, if some native English speaker who didn’t speak Spanish tries to pronounce ‘lejos’ using the ‘ley-hoss’ transcription, would they really pronounce /'le.xos/, or would they pronounce /'leɪ.xos/ instead?

¹ For the sake of simplification, consider /h/ and /x/ the same phoneme

Solution 1:

When people don't know a language, they tend to hear the phonemes as ones from their own language. Americans who don't know Spanish and hear the word lejos hear it as /leɪhoʊs/ or /leɪhɔs/. So that's the way it gets spelled in phonetic respelling.

You may think /ɛ/ is closer to /e/ than /eɪ/, but native English speakers (me, for one) don't. In fact, [e] and [eɪ] are allophones in English (meaning they represent the same phoneme). There are Americans who say [let] (late) but [leɪd] (laid).

The vowel /ɛ/ shouldn't be spelled "ay", because there's a closer vowel in English: the one in red, which is usually transcribed in phonetic respelling as "e" or "eh".