The weapons stats are based on what it can do. A steel sword can do all of those things I described (well, maybe). Its stats have nothing to do with what is smart in a fight. So just because to competent warriors fighting each other wouldn't normally do a full swing (which they would do occasionally), doesn't mean that a steel sword should only ever produce cuts and not break bones. Even a small stab, or a short swing, would fracture bones occasionally, if you're penetrating to the flesh, then your bones are going to see some damage (unless its a purposeful shallow slice).
Counter point. What of an armed assailant attacking unarmed, and unarmored, civilians? There is little reason to be cautious, so full swings will be used more often. A steel sword can most certainly cut a mans arms off, as he raises them to defend himself. The stats of the sword reflect this. If there is a bug anywhere, it should be to make short swings used more often, and full swings less often, but I think that's already modeled in game? The numbers are probably a little off, and it would be nice to see a community overhaul of the raws, adjusting things, but I would not say the numbers are far off.
If powerful strikes are used to aggressively in combat, I would support a tweak to that. Ideally, somehow influenceable by the raws so that individuals could tweak their dwarves to have the appropriate amount of restraint in combat they deem necessary. We can argue about the frequency at which bones will break with shorter swings, or the frequency that full swings would be used, maybe swords do break bones too often, but its not because the sword is modeled incorrectly, maybe combat needs a tweak?
(And here I think we've finally agreed. You're arguing breaking occurs too often, I argued a sword is very, very capable at break bones often, and the argument has since veered towards how combat is handled.)
I think the only way to solve it now is for someone to create Historical Dwarven Martial Arts, get many practitioners, stage mock-up battles, and once skill converges on a true fighting style, we take the frequency of different attacks used by those practitioners, and try and model that in game. Or we could use a historical analog, but that seems less dwarfy to me...