This appears to be a deliberate coded design decision of the level 5 (yellow) privacy setting. I too would like to see my wife listed as my wife (even though we are both living), rather than simply the mother of our children. It seems spouses aren't considered blood relatives, so they aren't a part of our tree.
I can't say that I understand the design decision either. The coded definitions of what is visible or not at each level does not seem to be very well spelled out, and there appear to be loopholes in unexpected areas.
Personally, I think the current privacy setting definitions are too strict, but I suspect there are others who don't consider them to be strict enough. Privacy on the internet is a bit of a joke already. You'd be surprised at the amount of "private" information that can be easily gleaned with a simple Google search.