Well, I wouldn't want to put it to the test, but I do believe that is the purpose.
The algorithm is much "smarter" with v1.20. Before v1.2, if I put the the truck on the bench, set the throttle trim on my tx so the ESC was going forwards slowly without me pressing the trigger, and I stalled the motor by grabbing the wheels (not advised without gloves - trust me), there would be a surge of current while the ESC attempted to send more and more power to get it to turn. If the motor was seriously stalled in the real world, this could lead to a "bad" situation. However, with v1.20 fimware, stalling the motor does NOT cause large amounts of current, just a little chattering while the ESC tries a little to go, sees it can't, and lets off the power, and then tries again repeatedly. Much different and much better IMO.
Do I recommend gearing really high and seeing if this will prevent that? No. That's just tempting fate.