The pixie rogue strikes a Kraken with a sap ...
.. and KOs the kraken ... (ie sneak + subdual, knocks it out ...)
That really doesn't make much sense either .. and yet the rules support it ..
What's the point in coming up with "extreme" situations to "prove the point" ...
Personally - I don't think it proves a thing.
Invisible dire lemmings? Yeah, sure ... whatever.
Is there an "issue" with Cleave + AoO ..
Probably ... as I'm sure there are "issues" with a lot of things ... it's an abstract system guys ...
abstract ... meaning "not realistic".
Ok, if you want to fudge it so it's "more realistic" for yourself .. knock yourself out.
I might worry about it if I ever meet someone silly enough to try pulling these crazy tricks in a game I'm running ...
Been playing every week since 3.0, strung out across 4 different play groups, + Gen Con Indy and never hit any of these situations ... (not saying they don't happen - just that I've never had an issue with them).
Cheers!