I think the issue here though is that the permission for access remains even after you're not using the open/save dialog and that's not obvious (or controllable from the UI) after the fact.

I think it's reasonable to expect that an application gets access to a file you access through open/save, but the fact that the access to the directory and all the items in that directory persists after that isn't necessarily expected. Especially given that the near equivalent workflow on iOS doesn't behave like this and that's what a lot of users would probably expect. On iOS an app can ask for access to your photos, which you can allow, or limit to specific photos or deny. If you allow access to specific photos and then the photo selector appears, even if you chose an album, the app will only get and retain access to the specific individual photos you gave it access to. It can not read the contents or even the names of any of the other photos in your library.

It seems pretty reasonable to expect that if the "Documents" folder permission is turned off for an app on macOS and you have given the application access to a specific document inside your documents folder, that the application would not also get (and retain) access to read from all the other folders and files within your documents folder.

I agree that this is the default behavior of most desktop OSes (including macOS), but it's also something that seems reasonable for Apple to change given how important sandboxing is to them in general, and how important it is in the broader context of always connected computers with multitudes of arbitrarily networked applications running.

Isn’t it exactly the same on iOS? If you select a folder, the app gets a security scoped URL for the folder and can read/write the entire tree. The app can also then create a bookmark to persist the security scoped url and use it whenever in the future.