Picking spots on defense is different. In your setup zone, it is assumed that you will find optimum positions--you control the ground and can walk it. But you can go into your opponent's set up zone and find ideal locations to attack a village, for example, without ever having been there.
It would be cool if that feature could be turned off. I was hoping that moving the difficulty setting to "Iron," for example, would disable the "recon by target line" feature. You could only check LOS from your current location.
Granted, the unscrupulous could certainly still do this in the map editor, I suppose.