I don't think this is an aircraft limit. Dragging up lots of information from the back of my brain I seem to remember the localiser signal is only accurate beyond 10 degrees from the centreline outside of 10nm, maybe this is an instructor technique to ensure that you don't get a false localiser intercept.
As I say with 8 years on the A320 I don't think there is a limitation on where you can arm the LOC.