This set back is common especially with some seismic requirements. I have seen it from time to time, but it is usually a 1/2" for the stuff I've seen. I don't know exactly where it comes from, as in what document calls for it. When I spoke to a detailer they said it was on the contract drawings and thats where they have gotten it.
Now as far as fabrication, it is common to have the fitter or welder miss this note. It is usually because 99% of the time the other projects don't call for this set back, then everyone get's in the mode of doing the same ol thing they have been doing for months or years, then as soon as you throw something new at them, they either miss it, or freak out and can't believe they have to stop a 1/2" back in my case.
Now when I get drawings that call for it, I highlight it to make it obvious, then more importantly, I ask/ make the fitters measure down and draw a line 1/2" from the end to the hopefully the welder can see this and stop or start at the line and not go past it.
Will it still happen, yeah, but it eliminates or reduces the chances.
When they do exceed it, I call the engineer and ask them if it's ok that we did this on X amount of stiffiners and so far they have always said it is ok as is. The hard part is you can't really efficiently grind/ remove the end of the weld properly. Its too tight, you reduce the throat of the weld next to the removed area, personlly in my opion I think its better to leave it as is, than to go grinding it out. But again you need to get some back up to that when someone comes behind you and calls you on it. This way you can expalin what happened, and what you did to address it.
I would have talked to the detailer like you did, then if time permitted, get with the engineer and expalin the situation. Some shops find it easier to just address it then and now vs waiting a day or two. In that case, it gets corrected so your good.
Chris