So why isn't cleave "40% less damage when dual wielding"?

Too lazy to dig up a dev quote this time, but trust me on this if you aren't aware yet: The only reason Cleave attacks with both weapons at once is because the animators already animated Cleave before they worked out dual wield mechanics.

The devs' intentions (or at least Mark's, if I remember correctly) was for dual-wielding to be the middle ground between 2-hand weapons and using 1-hand weapon with a shield - dual wielding grants some attack speed for damage and some block chance for survivability, but is not as tanky as 1-hand + shield nor as deadly as 2-hand. To this end, most melee skills function by having dual-wield users alternate weapons. Dual Strike was a bit of a special case, intended to be the "roughly double-damage" skill corresponding to Double Strike and Heavy Strike. Since the animators worked too fast, they shoehorned in the "40% reduced physical damage" to compensate.

So, why isn't it 40% less damage so that it affects elemental damage as well?

Do the developers think dual wield elemental cleave is currently balanced despite being completely unintentional at first?

Is it the same situation as Lioneye's Glare, where too many people have invested into elemental dual wield cleave and they don't want to anger anybody?

Do they think "40% less damage" would be too much of a nerf, and are waiting on trying to find the correct numbers before making a change?

Do they want a clean tooltip, and are struggling to keep 40%phys/other elemental reductions balanced so that current builds remain viable?

Is there a reason I'm missing?

I really don't know the answer to this, but this penalty is nothing when you have phy damage talents or even 200+ strength. This is why my phy cleaver does 15k dps with a 4link. I guess the build helps out a lot, but this ability is already overpowered.

That animation reason is a pretty bad reason lol.