Imagine a 3-player game, where one person is winning by a large margin. The other two could vote to cancel under your scenario. Eliminating the Karma penalty after dropping makes much more sense in my opinion.

It's not the shortest path. The shortest path would require going through your buildings on the south. Note however that isn't a legal federation either, as it would include unnecessary buildings.
Which means you cannot make a fed using these 4 buildings at all.