Yep, T-Mobile has obfuscated their roaming terms, but basically there are some partners that you can roam on without limits (typically US Cellular or Viaero), and others that are intended to be "fill in" for fringe areas. AT&T roaming is the latter and isn't nationwide. If you're in an area where T-Mobile thinks you should have service, you'll go to No Service and never jump on AT&T. Other places where T-Mobile knows they are lacking coverage, you can roam on AT&T—I experienced this with my spare T-Mobile line in Michigan's Upper Peninsula recently.
There isn't a great way to handle it—does a carrier verify coverage at a potential customer's home/work address before selling service? Still, those places may be mostly Wi-Fi, so it won't matter (that was the case at my dad's old place - he was always on Wi-Fi calling). Without knowing the full story, I'm guessing they might have sent warnings before ending things, but they could've simply cut off roaming on that line or found a way to handle it much more pleasantly. Similarly, I have a family member that travels up to Alaska a lot and avoided them for that particular reason—didn't want to risk being on GCI (the third carrier up there besides AT&T and Verizon) too much.
Then again, with T-Mobile trying to build out their network more and more and more regional carriers disappearing (US Cellular wants to sell, Verizon has been gobbling up LTEiRA partners), we may see fewer and fewer roaming agreements in general. Plus, while it is extra income for AT&T, it may be worth ending the agreement so they're not propping up a bigger (in terms of customers) competitor.