It's because, in the past before this mechanic if you got a troll or unhappy camper in your group, that ended up needing to be booted, they could stay in dungeon and troll your group big time. Training mobs into the group, and not allowing a fourth member to port in. Also the old dungeon chest mechanic only allowed for one person to loot a treasure chest. People were joining groups to get in a dungeon, then dropping, staying out of combat and stealing every chest.

Can't say I love the auto remove, but that's why

I think personally that there's a larger issue with dungeons that hasn't been shared around these instances.
@ZOS_GinaBruno it might be worth adding this topic to an ESO Live shows or at least a QnA on the exact question of why players are booted from dungeons.

I understand that only 4 players can be in one group dungeon instance however, given the requirements some other opportunities should exist to complete the quests and speak to NPCs.

Have you all considered moving the player to a solo instance of that dungeon at the specific points of interest vs booting them entirely? Seems simple as we can enter dungeons solo and most often players just want to interact with NPCs and not reset mobs to kill and clear. (Just thinking and offering a logical suggestion)

If you are on PC/NA come join 'Friendly Dungeon Runners' we currently have 54 members. I haven't seen or heard anyone getting disband yet. We have new players, advanced players and of course confused players ( me ).

https://forums.elderscrollsonline.com/en/discussion/283173/friendly-dungeon-runners-recruiting#latest

I personally don't have a problem with someone listening to the dialogue, as long as you let everyone know up front I don't see how it could be an issue.