Its normal to exceed the speed limit e.g. passing. No absolute limit can be arbitrarily set without tying the pilot's hands/limiting their options which could make the roads more dangerous.

It may be common to exceed to speed limit when passing, but it is illegal. The setting of these speed limits is meant to be objective, maybe are sometimes subjective, but it is wrong to call them arbitrary.

If the car autopilot software permits faster than legal speed driving, the manufacturer is taking on liability in the case of speed related accidents and damage.

No its not actually illegal. Here's an example regulation from Washington state:

http://app.leg.wa.gov/rcw/default.aspx?cite=46.61.425