That's alarming. I set the profile to Unlisted, which is what it should be.
The system wouldn't "know" it should be Unlisted because there isn't a birthdate (which is not inappropriate; we don't encourage the addition of any kids at all, except as placeholders). If the birthdate was under 13 years ago it would automatically be Unlisted.
If the profile was added as the nuclear relative of a living person it would automatically be Private. That's fairly conservative for a site like ours. But the system doesn't know a person is living if there is no recent birthdate and none of the status indicators say they are living.
The bottom line is that there is no technical, automated way to know that a name and a photo represents a living person. The burden has to fall on the human beings. That's why we make sure a big deal out of asking users to respect privacy, use caution, etc.