It's also called "regulatory capture" and it's been around in some form (implicitly or explicitly) since there's been laws in existence.

Well, businesses — and all parties — who will be affected by legislation should be able to provide input. Otherwise we too often get clueless legislation that is massively mocked and rightly bemoaned on this site — because the legislators have no real clue of the technical issues involved.

Of course, the businesses should be only one part of the expertise that goes into writing the laws; other experts MUST be involved, or it will indeed be a fox and henhouse situation where the fox designs the legal locks so they can always be opened by foxes...

That's not what model legislation is.

That can be an example of model legislation but, broadly, model legislation is created by an organization for use as an example for multiple different legislatures (usually states). Everyone from think tanks, busineses, the EFF, the ACLU and PETA draft model legislation.