Something that only runs once per second is not going to be able to keep up with with a process that is dirtying memory at full tilt, which is probably why they chose to enforce a hard limit by evicting the least-used pages to the standby list, from where one can usually get them back quickly without encountering a hard fault to disk (a soft fault was probably like 10,000x faster than a hard fault back when they did this work). They must have viewed thrashing as a pathological case that programmers would diagnose and repair, just like you have. After all they do provide some pretty good tools for diagnosing memory use.
You may argue that the 32MiB limits needs adjusting to follow Moore's law, but Moore's law stopped working for laptop DRAM sizes many years ago.