Since this visually breaks anything but small hangout worlds without a skybox and it is extremely time consuming to explain the concept of clipping distance I don't see any benefit in saving this setting and think it should only be turned on manually in an extreme case.

As someone who spends 99% of their time as a 0.20m tall bird, I think it should be made clearer in the graphics menu that the setting people that want to spend their time at a similar size in most cases want to set it to Dynamic instead.