The assumption that the grid needs to be able to move in the reinforced zone, in order to develop strength to hold the wall face in place, is wrong. Yes, in soil, the grid needs to move, to “set in” and develop the friction along its length.
But lets say it was cast into a massive block of concrete. Would it need to move? No. It would develop its strength very early on. There may be some movement right at the interface, but the strength of the material it is in would reduce the development length to get there, concentrating the load near the face of the concrete. The material would be able to resist up to its maximum capacity, and then break, just like at the connection to the block (assuming the connection str is high enough). So what would the downside be? Well, if the grid was locked in so tightly, then it is likely that the length of “loose” grid between the block and the treated soil could vary, and lead to the wall face being able to deflect differing amounts. This could result on more concentrated loads on some of the grids. As MSEdesigns said though, this is not concrete, it would be soil cement. It will still act like soil . . . an improved soil at that.
I think that is the cement is sufficient to hold the soil, the block is merely there as a facing, and the grids are shortened to just hold the facing in place, then good. If the cement does not improve the soil to that degree, and just improves the internal stability, and the grid length is determined by the global stability, then you need to look at if you are actually saving anything (i.e. can you remove some grid, go with a cheaper grid, etc.). And in the second case, is the cost of adding the cement (and all that goes with it) worth changing up the crews normal patterns during construction? Probably not. I think it gives more variables to monitor, and would slow construction, resulting in a less reliable system and more costly construction.