I've always referred to this as the "TOGA Dead Zone."
I am aware of the dead zone, but I never questioned the reason for it. Could it be that TOGA doesn't work below 5' because the throttles are disabled for manual landings? What other reason would Boeing disable TOGA in this area?
Having said that, the 737NG has a flare thrust lever retard mode at 27' RA if the A/P is not engaged (with the aircraft on the ILS and flaps extended).
I think the 777 also disengages at around 25' for manual landings.