Seems like it could be fixed with a simple design change.
But I am not a fireplace lawyer so I won't profess to know.
Almost without comment. All I will say is that we have some friends in Germany living in the 'countryside' (as much as that's still a thing in densely populated Germany) that heat their main living area with one of these (way less elaborate design lol). My grandma had one of these sitting in the wall between kitchen (right next to the eating area) and the living room.
We had fireplace powered central heating -— radiators throughout the house linked to pipes behind the firebox. In the morning I’d wake up to ice on the inside of the windows, and by my teenage years it was my job to head downstairs and light the coal fire first thing in the morning. It worked well once the fire was up and running.
This was in the ‘90s btw, I’m not _that_ old.
Different places, different 'customs' i.e. systems we are used to. All have their pros and cons and sometimes it's just that we don't know that different systems exist.
Back in the day (i.e. 1700s) everyone heated with fireplaces. And many of them (e.g. 2nd floor ones) weren't that big.
The smoke is poison, and unlike a furnace, gas fireplace, firebox, or wood stove, there is no heat exchanger, so you can't capture any of the heat out of the flue gasses.
It's counter-intuitive, I know. But this is why everybody congregated around the hearth in the days of fireplaces.