[Kromm]

The crucial thing to note here is that when you move, forward movement requires you to turn to face the hex you're entering. All-Out Attack demands forward movement. Ergo, in your example, the chap doing the All-Out Attack is moving in such a way that his target is always in his own side hex. This means he's forced to do a Wild Swing to hit; see p. B388-389 for the ramifications. The short version is that he'll likely miss, which ends up hosing him far more than his opponent even accounting for his target's reduced defenses for being hit from the side/via runaround.

Another vital point is that the defender is allowed to retreat. This gives +1 or +3 to defend, which offsets the -2. Moreover, the retreater is allowed to turn as he backs up, which means that he ends up in an ideal position to strike his now-defenseless attacker.

Neither of which changes the fact that, yes, running around the far side of someone from a shield or a weapon means that shield or weapon isn't useful for defense. But it's important to realize that this just about always hurts the person doing the All-Out Attack a lot, so it's only fair to allow a bit of a tradeoff – that being the ability to avoid a specific defense.