Probably it should be replaced by Risk management and just have it low, balanced and high.
The main problem is not that defensive mentalities are broken, it's just that in general they are not well balanced in terms of risk/benefit vs the attacking ones. In current ME in general you have more chances to win using positive or attacking than cautious or defensive as defensive means basically taking less risk and players will waste more time, pass between defenders with the hope of not loosing the ball, so it's basically useful if you are aiming to tie 0-0 into boring games to watch as usually low tier teams do.
Then we have us, human managers. Most of FM players are only looking to win, to gain promotion etc and ending most of games 0-0 won't help you on that so that is why we end using the more risky mentalities. Either we win, over perform and have a lot of fun or we lose, get either bored of that save or fired and restart with a different team as obviously we won't have problems feeding our families or ending jobless if we are fired like a real coach would.
With both factors together, there are not enough incentives for humans to use the low risk mentalities.
As we already have pass length, pressing intensity, LOE and LOD, play from defense, width, etc there is no need for the extra layer of risk or mentalities that are overall modifiers of all these ones together? It can lead to confusion like what is the difference in players positioning and pressing when using defensive mentality with high LOE and LOD vs attacking mentality using low LOE and LOD? or playing with more width with defensive mentality vs playing narrower with attacking mentality?
Again imho we just need risk management settings as single modifier not tied to other single modifiers like attacking width, LOE, LOD, pass length, urgency, etc as we can already define these individually.