The best idea that I currently have is that all options are be available and the user can pick up the best suitable for him for the exact situation, but if that's not the case - then I have no clue.
"Choose the New Subobject location"
- Default position 0 X/Z/Y
- Closest point to the center of X
- Middle of all selected points
- Last selected point
For me, the best is always the middle between the selected points, but maybe that depends on the situation. My 3D experience started when you published the Mod Editor, so I have very little experience. Others more experienced as Eric could give their opinion. Overall it's not that hard to move the points in the proper location afterwards.