...By the way the cruise control should always obey the distance limit that you set but it changes based on the speed and etc. It should be always at the same distance no matter what, Am I missing something?
I do agree with your prior point about braking earlier and more smoothly when approaching stopped traffic. However I do not agree at all that the following distance should be a fixed distance independent of the speed.
This is a pretty fundamental point regarding safe following distance. You should follow cars in front at a more or less adequate
time interval, because this takes into account
a) human reaction time, a good fraction of a second, and
b) increased braking distance as you are moving at a higher speed.
(And by the way this doesn't really change just because you are driving a computerized car with faster reaction time and good brakes. You still have human-driven cars and trucks behind you that should not be expected to react or stop faster than normal just because your car can do so.)
This is exactly why driving instructors teach a following rule based on time interval: classically this was taught as the "two second rule", i.e. you should be able to count two seconds from the time the car in front passes a marker, to the time that you pass it.
The physics would say that a completely fixed time interval is not really correct but it's easy to understand and to teach. In actuality most drivers do not obey this two-second rule; I think more typically people follow at about 1 second, give or take. This is definitely not as safe but it's not completely crazy if you are attentive.
Recently I've seen that official driving instruction courses are trying to teach a three or even three and a half second rule. While this may seem "safer" from a pure physics point of view, I think it's actually wrong to teach that. If you actually try to obey that extreme rule in moderate-to-heavy traffic, people will become very impatient with you and it actually becomes more dangerous because they will drive around you to fill that long gap.
But the bottom line is that a fixed distance is definitely
not the right driving policy. Neither for human drivers, nor for computer drivers in mostly human-piloted traffic.