Executive summary: That is not a critical value unless you are flying waypoints using absolute coordinates. All other modes are based on relative values where it doesn't matter whether where you are is considered 1000m or 1100m altitude. It reacts the same when it finds itself a meter higher than 1000 or a meter higher than 1100. It says "I need to come down a meter."
As a matter of fact, the DJI/Naza GPS/mag unit that we are supporting in the next release does not even supply GeoidSeparation, so it is assumed to be 0.
As you may be aware. there are several definitions of true altitude. One that treats the earth as a perfect sphere. One that treats the earth as a simple ellipsoid that for instance bulges at the equator. One that uses barometric pressure. One that knows that some parts of the earth (rock and iron) are heavier than others (water and air).
Using geoid separation make a more accurate value, but it also makes it more painful to compare with data from simple instruments.
I don't know the original reason it was done this way. It might be that for instance when flying at 100m over the ocean in shallow water with heavy rock underneath vs. deep water with light rock underneath, the altitude above the actual water is more accurate. I haven't researched it.