It's one of those things that appears to be simple to do, but really isn't. At the end of the day, there are really only two ways to do it:
Mark the highlight mesh in the stencil buffer, then draw an extruded version of the mesh, skipping any pixels marked in the stencil and thus producing the outline. Works with depth out of the box, but will typically produce a hard border, not a soft glow. However, creating the extruded mesh is not a trivial thing for any non-convex mesh. Might be that Unity has tools for this, but we don't, and spending the time to implement something like this for an effect that's already controversial, anyway, seems like a huge waste of effort. There are some techniques with geometry shaders that can be used here, but you still need to preprocess the mesh data for them to work.
Do an image-based effect. Draw the object to a separate color buffer, then blur it to create a soft screen-space silhouette. Can then be applied to the original buffer, again using a stencil mask to cut away the insides of the object. This is what TDM currently does, it looks pretty decent and is relatively easy to do. However, it has no concept of depth, at all. I've tried some hackery on top to get it to respect depth, which is what r_frobIgnoreDepth 0 does, but it's not pretty. Might be able to do better, but that would eat more development time with uncertain outcome.
In the end, the current implementation is what you can do in TDM with moderate effort. Anything better requires significantly more effort, and given the lukewarm reaction to the feature, I really don't think it's worth that development time.