If you misunderstand this aspect of linear probing, so do I. I agree that if the hash table is near full then performance degrades towards O(n) per insertion. See Don Knuth's 1963 analysis for all the details.
Parenthetically, I was amazed to see that the first analysis of this problem was actually done by the mathematician Ramanujan in 1913, whose results implied "that the total displacement of elements, i.e., the construction cost, for a linear probing hashing table that is full is about N^(3/2)." (see here)
In practice, however, I don't think the problem that insertion is slow is the important problem with nearly-full hash tables. The important problem is that you get to the point where you can't do another insertion at all!
Thus, any practical implementation of a hash table must have a strategy for re-sizing the hash table when it gets beyond a given load factor, with the optimal load factor for re-sizing chosen either based on theory or experiment. Using experiments is particularly valuable in this case because the performance of linear hashing can be very sensitive to the ability of the hash function to distribute items evenly across the hash table in a way that avoids clusters, which makes performance very dependent on the characteristics of the items to be inserted into the table.