Default fence limits have always been there for Smart Mode. They have been there for Angle Mode as well but the two modes, in a manner of speaking, serve different customers. Smart Mode is intended for beginners, people that don't understand what they are doing, have yet to develop the skills necessary to correctly orient the aircraft for the desire direction of travel, and to prevent the aircraft from getting too far away for beginners to control in any manner. Sure, there are many times Smart Mode can and is effectively used for some things but if Smart Mode is the only mode one ever flies they are still essentially a beginner as they have failed to learn the capabilities of their aircraft and failed to develop their skills with command and control. They just happen to be a beginner with lots of beginner flight time.
A larger problem with Smart Mode is that far too many fail to learn anything about it before flying. They don't read instructions or watch informative videos, they just plug in a battery and power up. When they see the H doing strange things compared to their control input they don't realize they violated one of the requirements in using Smart Mode by launching the aircraft while inside the Safe Circle or by trying to force the aircraft to violate the Safe Circle while in flight.
You can alter the fence limits for Safe Mode (and Angle Mode) in the GUI. You are informed of this on page 20 of the H instructions. You have been chastising the system because of your failure to review the instructions and the system. In a way that's exactly why Safe Mode default distance limits exist.