Because the rocket isn’t a really an explosive like a bomb, it’s a pressurized fuel tank. If the rocket fails during launch and there’s what we’d colloquially call an “explosion” it’s not going to extend too far past the rockets current position, it’s just going to cause a massive fire ball. But the keep out zone is far enough away that there’s absolutely no risk of that fireball reaching you.

Well the FTS failed on the first launch, so if there was a guidance malfunction it could have probably hit something outside of the designated safe area. Fixing it was a prerequisite for the second launch so I assume it's not going to happen again.

Guidance failure is my perspective.

There's a practical argument to be made that acceleration + range control = rocket detonated before it leaves bounds.

But from a physics worst-case perspective, if something can move itself to orbit it can move itself plenty far terrestrially.

When it comes to distance from an exploding rocket, inverse-square works in your favor. It's relatively straightforward to calculate an upper bound on how big the blast can be based on the amount of energy in the fuel.

(I believe the closest you can get without going into the exclusion zone is about five miles.)

That's assuming it doesn't fly to you and then explode. As unlikely as can be engineered, but energetically possible!

I mean, it's potentially dangerous to most people on earth. That's why there's a range safety officer, and a flight termination system (explosives, rigged up to unzip the tanks) on board.

The last launch got them in trouble, because they rocket took too long to explode after the termination system was triggered.