devtrackers.gg
They stated in one of the dev talks during ExileCon that they use "nearby" specifically this way on purpose. It's one of the few wording choices in the game that players have an issue with that is completely purposeful, but I cannot remember what the explanation was. I think they always use "nearby" to stay consistent, but the reason they don't specify the radius or normalize "nearby" to be a specific area is because it's just a useful word to describe an effect.
For example, "Share Endurance, Frenzy and Power Charges with nearby party members" simply sounds better than saying "Share Endurance, Frenzy and Power Charges with party members within 120 unit radius".
The short version is that regardless of showing specific units, the game absolutely needs a way to indicate that an effect has a radius without indicating a specific fixed value. Because a lot of those values are not fixed. "Nearby" being like recently and always meaning the exact same number of units doesn't fix anything, it means we then have to come up with a different word for all the ones that aren't that radius, including the large number of such effects for which the radius is modifyable, and thus no fixed value could work.
Long term, the goal is to be able to give distances (ideally in some actually reasonable measurement like metres rather than just game units - which mean nothing to most players), and those would account for modifiers where applicable, like how durations work. But that's a huge amount of refactoring skills and other things to define radii as stat values, and apply correct modifiers to them, which is just fundamentally not how those were ever handled in the game, and imposes certain limitations on what can be done with them that currently some skills or other mechanics are taking advantage of not being restricted to. It's a big task and while I'd love to just skip to it being done, that can't happen.
In the meantime, for something like an aura, the fact that something has a radius limiting it is important information that needs to be conveyed, regardless of what the specific radius is. It is not reasonable for your aura skills to just say "You and allies have X" because that is not true - we'd be up to our ears in complaints from users if Auras just said they applied to allies, because it doesn't take much testing in-game to see that's not the case. There is a radius limiting which allies that aura will apply to, and thus that specific piece of information is very important to communicate. That is the purpose of "nearby". "nearby" in PoE has never been intended to say what an effect's radius is, and it never will do that because it's not sufficent to do so. "nearby" means "this only affects things within some radius, as opoosed to everything", and it has been used in that way entirely consistently over the course of the game's ongoing development. "nearby" always means exactly the same thing: "this effect has a radius".
It would absolutely be great to have any effect with a radius list what it is in a numerical measurement, but we cannot do that yet and while I hope we get there it's a likely a decent way off. That doesn't change the fact that the information that is communicated by "nearby" is still important as well. Having the information that something is limited by a radius is fundamentally better than not having it, even without information on what that radius is - and that's what "nearby" is for.