It would be foolish to hesitate and disengage close combat to "try to aim for the head" in a real time combat simulation. Strike where you see an opening.
I agree with you to a point.
I'm basing my opinion on previous implementations of the system. It doesn't mean that they couldn't make it better.
They have locational damage in Dead Island and it works ok, but I am almost always aiming for the head. On the bigger "Thug" zombies, I chop of their arms and then aim for the head.