Great question. At least in our algorithms we do this - to adjust the driving speed based on the conditions (e.g., visibility or perception capabilities).

At the end of the day, you can drive only as fast as your perception capabilities. A good example of that is how fast humans can perceive when influenced by drugs/alcohol/medications vs. when uninfluenced.

What is baffling is the fact that the car was driving at 38 mph in a 35 mph zone. This should not happen regardless of how well/poor your sensing/perception capabilities are.