I can't speak to the elevation change issue with any authority but my guess is that they assume that for a normal length trip the topography will be fairly uniform for a given area. My guess would be that after a certain mumber of miles and in certain areas it would default to the shortest distance mode.
I have noticed that using Fastest Time my 200w will not always route me the fastest way without entering a "via point" because it would take me to major roadways and avoid small towns.
You can't totally trust it anyway. Last fall it guided me down a minimum maintenance road and I had selected, "Avoid gravel roads" in my route preferences. I thought," how bad could it be? This is Iowa". Very, very bad! It was the most terrifying and exhilarating thing that I have done in years. Friends, if you see a sign that says "Minimum Maintenance Road - Enter at own risk", you should realize that the government agency that installed it is lieing to you. It is not a road at all, but rather a path of terror that leads only to vehicle damage and soiled underwear. My wife still does not speak of the events of that day. If you want a good laugh you can read about it here. the thread is called
"There I was. Thought I was gonna die". "Never completely trust your GPS. It knows about places that you never want to be.