They could have changed the effect of the spell from being spread to just being blank, but during that time people would kill the now super nerfed boss easily, basically exploiting the fact that it is disabled.

They probably thought that "this will pass, no need to risk players exploiting just because some low levels die a few times", and therefore didn't do that.

There is no easy way to add that location check on to the spell itself, so it would have to be a custom c++ code written for it, which requires way more publishing approval than changing the spell (sql). This would also require downtime for each server to apply the core code changes, and maintenence etc, which they used to have one day a week, and for planned things.

Once they had that code in place though they made pets immune, but too many players had lost a lot of gold in repairs etc, and the rest of the game lacked players due to fear, that rolling back was the easiest way to earn back approval of players.

Spell fixes required a server reset, yes. That was still a thing until Legion or something. Definitely a thing in wotlk client.