The Alquist-Priolo law is a funny law, as many laws are, but what makes it funny to me is that it’s aimed only at the risk of fault movement (coseismic offset) pulling apart a structure. As you say, living in earthquake country is just as dangerous 10 miles away from the fault, but there the danger is from the shaking (and fire, of course). It’s as if earthquakes, in the eyes of the law, didn’t even shake but were merely slow, gentle motions of the Earth’s crust akin to foundation settling that buyers ought to be warned about. So the Alquist-Priolo warning zone is something like 50 feet on either side of the officially mapped fault trace, but in terms of practical earthquake safety it’s almost meaningless.

Another thing that’s funny is that Alquist-Priolo actually makes sense in the few rare faults–the most important of which just happens to be the Hayward–where creep is important. Fault creep really can gently break your water lines, given a few decades, without any shaking. But even though Alquist-Priolo is a funny law that unexpectedly makes sense in Berkeley, a major university full of smart people can carry on in the notorious folly of its fault-straddling football stadium for eighty years with straight faces. You should see the innards of that structure some time.