A couple of points to consider, first, our modern outlook on almost everything, and second, the fact that all the players have pass on and we cannot ask them for explanations, only look at what they wrote, and decide if we believe it, or not.
Today, when we hear that they made the case longer so it wouldn't fit (and be dangerous) in other guns, we instantly think they did it to keep from being sued. But, was that REALLY the case, 90ish years ago??
Back then, as mentioned, companies were not really worried about being sued by stupid people. In general, at the time, society didn't believe that someone being hurt because they did something stupid was worth money, nor did they feel that it should come from the "deep pockets" of manufacturers.
ALSO this was not an era when the courts (in general) believed everyone deserves their day in court and you can sue anyone for any thing. Back then, judges were more likely to throw out cases they considered without merit, than to allow them to proceed. i can easily see something like this, "Councilor, your client injured himself because he foolishly ignored both manufacturer's instructions and common sense, and you admit to that. Case dismissed, stop wasting the court's time....."
I think that, if the people creating the .357 were "afraid" of anything it would not have been lawsuits from injured idiots, but getting a bad reputation and losing sales as a result. Remember that back then, rumor traveled on swift wings, but fact checking moved at a snail's pace, if, at all.
Suppose they had not lengthened the case, and a few people did suffer harm, DESPITE the warnings and instructions. Pretty quick the rumor mill starts telling the whole world, "don't by one of them S&W magnums, they blow up!
My cousin's sister's brother's uncle's nephew lost two fingers cause one of dem S&Ws blew the heck up on him!!!"
Doesn't matter what the facts were, doesn't matter much if the incident actually happened, once the rumors get started, they are devilishly difficult to stop, and back then, just as today, false/mistaken belief can be just as powerful, if not more powerful than facts, across the buying public.
So, I think lengthening the magnum case was a smart marketing move, more than an intentional safety move. Also extremely likely that because it ALSO was a safety move that the safety aspect was the one promoted and so became the "official" reason, because it showed how S&W "cared" about its customers, while the actual (and unstated) reason was that while S&W did care about its customers, it also cared about S&W's bottom line, and making the magnum case longer so it was difficult/impossible to put in .38s didn't hurt S&W in any way.
IF you really want to know the real reason, ask the people who did it, the next time you see them. Otherwise, go by what they wrote as the reason they did what they did.