I often get into debates over the code intention of paths of travel, and it seems the most common opinion is to avoid "As the crow flies" diagonals. Unfortunately, we'd be stuck relying on the old railing-as-path method in this case. It would be extremely useful to be able to toggle ortho vs shortest distance.
I also have heard of some scenarios that require a path a fixed distance from a boundary wall (to feel your way through heavy smoke I suppose). This may be a third behavior worth considering.