One argument (that is unrelated to optimization) for keeping signed wrap undefined is that most instances of it is a real bug. By keep signed wrap undefined, you now have the option of using -ftrapv to weed out such bugs.
That might be a valid argument for making -ftrapv the standard. It's certainly not an argument for keeping it undefined. Most -f options tweak the standard in some way and defining overflow would not make -ftrapv suddenly go away.