Further, instead of characterizing as UB all situations where a useful optimization might affect the behavior of a program, it would be far much safer and more useful to allow particular optimizations in cases where their effects might be observable, but where all allowable resulting behaviors would meet application requirements.
As a simple example, instead of saying "a compiler may assume that all loops with non-constant conditions will terminate", I would say that if the exit of a loop is reachable, and no individual action within the loop would be observably sequenced with regard to some particular succeeding operation, a compiler may at its leisure reorder the succeeding operation ahead of the loop. Additionally, if code gets stuck in a loop with no side effects that will never terminate, an implementation may provide an option to raise a signal to indicate that.
If a function is supposed to return a value meeting some criterion, and it would find such a value in all cases where a program could execute usefully, but the program would do something much worse than useless if the function were to return a value not meeting the criteria, a program execution where the function loops forever may be useless, and may be inferior to one that gets abnormally terminated by the aforementioned signal, but may be infinitely preferable to one where the function, as a result of "optimization", returns a bogus value. Allowing a programmer to safely write a loop which might end up not terminating would make it possible to yield more efficient machine code than would be needed if the only way to prevent the function from returning a bogus value would be to include optimizer-proof code to guard against the endless-loop case.