Basically @PNWParksFan explained it quite well from a coding perspective, but to give a slightly more practical example without technical lingo: imagine being in a pursuit and calling backup. Then you crash into a car that decides to swerve into your path, and you get behind in the pursuit. Your backup doesn't crash into and continues following the suspect. You take a bit of time to reverse, fix your vehicle as your engine is broken and then try to catch back up to the pursuit. Except then, all your backup is deleted by ELS as they passed the (relatively low by default) distance threshold. This results in an LSPDFR crash - and this is what people will see, they will come over to the support forums of LSPDFR to complain about an alleged crash in LSPDFR, while this is caused by improper disposal of ELS.
An update to ELS will need to be released to ensure proper cleanup/disposal by ELS, which should be able to be changed pretty easily. Instead of deleting the vehicles, ELS would simply stop controlling AI lights past the distance threshold (I've already let Lt.Caine know).
Unused police vehicles will not be all over the map, and ELS's deleting feature was certainly not added for this. It was added so no unnecessary resources are expended by ELS on AI vehicles that the player won't see anyway.
The reason unused vehicles (and peds, and other objects) are not all over the map is because of GTA's persistent flag - this is set by either a GTA script or a RPH plugin. Once a vehicle is set to non-persistent, GTA automatically cleans it up. The problem is that ELS does not respect this persistent flag and simply deletes the vehicles. It thus interferes with other scripts' proper operation, even the normal GTA V police response, which can (and has) lead to GTA V crashing entirely.
As far as GTA IV goes, that is hardly comparable as it uses a totally different game engine. It was a lot less stable and thus behaviour in ELS IV may have had to be different for optimization for IV - I haven't coded for GTA IV so I don't know what that was like, but it is irrelevant to GTA V and ELS V.
The terms 'bug' and 'fix' are used here to accommodate for those who may not be such technical experts. More accurate terms could have perhaps been used, as the deleting behaviour was intended in ELS - I didn't notice the effects while testing ELS as I hadn't filled my slots with ELS vehicles.
Setting the max distance to a higher value is only a temporary and certainly no full fix, as it can not be determined how far away script-used vehicles are spawned from the player. It merely mitigates the issue and makes it less common.
Hope this explains it a bit better. It's certainly not an unfixable major disaster and in no way degrades the usefulness and greatness of ELS. It's just a pity it slipped through while I was initially testing it. Testing role never ends, I guess
Cheers.