You can “include suggestions not seen nearby” on the Android app (not sure about other apps). That might be the behavior you are thinking of.
https://forum.inaturalist.org/t/testing-updates-to-the-android-taxon-chooser/19742
But according to the help page, what you are describing seems like expected behavior.
By default, iNaturalist only displays suggested taxa that are visually similar and are expected nearby (if visually similar taxa are expected nearby). If no visually similar taxa are expected nearby, it displays visually similar taxa regardless of where they are expected to occur.