"The whole point of this excercise is to make a person aware that there are limits to the length or width of a step"

Yes, there are limits, but the primary factor determining the limit is the speed of your body at the time when you take the step. A step in the direction your body is moving can be fairly large (in fact it has a substantial minimum size) wheras a step in the direction your body is not moving would have to be very small indeed.

Drawing a circle on the floor doesn't really say much about where you can step, because you can't go any of those places unless your body is moving, and if you body is moving you can only go in that direction.