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Isn't it only a few 100 yards worth? So thieves can still camp out in a 1 square mile area to find that nice carbon fiber bike at 5am in the morning?

You can select a radius of 1/8 to 1 mile.

That feature is fairly recent, and I believe it is now enabled by default.

If by "is fairly recent" you mean "has been around for over six years", yes.

Frankly the blocking is a radius around the start and stop points. If they are both at your doorstep, all your rides will extrapolate to points on a circle with a center very easy to determine. The feature as it is, is snake oil for someone determined enough. I started to start and stop my rides some distance out, just to add some variation.

The hidden address feature picks a random centroid near your hidden address, not exactly on it. Averaging out the circle finds that random centroid, not your hidden address.