I guess the problem that arises when you separate locations is how to draw borders of a location, and my bet is that Larian want to avoid any dark zones or any kinds of visually artificial borders. While I can clearly see where they come from in this, I also think there are many creative ways of how to make said borders looking nice and natural: mountain ridge, river, etc.
Either way they will have to restrict camera with this approach, but I don’t think it’s something necessary evil.
