The reason why they don’t use barometric altitude sensors is that it would either need a pitot tube or Aerospike, and that due to their inherent limits of mechanical tolerances they are less accurate, and on top of that, the large terminal velocity variations of rockets means that it would exacerbate the problem.
Not that Timed / Distance fuses, don’t have their uses(e.g. Illumination / Smoke / Flechette).
Its two scenarios explaining why and where an Airburst and Proximity fuse may fail.
Its just that the Dev’s hadn’t actually implemented variable timed / distance fuses at that point, and if functioning correctly there is little distance since the FCS provides the balisitic computations that were needed to set them properly.