Aren't they prone to shorts too, when the pin isn't long enough? I would think that, with the +/- connections so close together and right on the battery like that, you'd want all the leeway you could possibly get, just to play it safe. Alternatively, you can use the separately-available upgraded topcap with the 510 connection, right (just wouldn't be hybrid anymore)?
I hear about these things severely shocking people and I bet that's what's happening. The hit gets a little skewed and, because there isn't any leeway, the battery ends up touching both the pin and the threads (the threads aren't supposed to touch the battery). Then they warn other people about how unsafe the mod is.

Maybe it's a safety feature that they built into the mod, requiring that the pin be long enough for the switch to work right.