I’m a little more familiar with the C++ committee than the C committee. The C++ committee prefers to declare something an error than to declare it undefined behavior. They only declare something undefined when they believe it would be unreasonably difficult for the compiler to detect the problem (e.g., using multiple, incompatible, definitions for an inline function; which can happen if you have a macro expanding differently in different parts of the code, or you have multiple definitions for the function, but only one definition is ever visible to the compiler at any moment in time).
I’m pretty sure the “signed overflow is undefined” rule is something of a special case: it should be easy to detect when source code doesn’t have a hard coded upper bound, but giving an error or warning in all cases will create too many false positives, and declaring that it wraps on overflow has been deemed unacceptable by the committee.