Yes, cutoff doesn't work with new threads. And it doesn't make sense anyway because cutoff depends on thread creation date and new threads also sort by that field. The cutoff is there for sorting that does not have an index in the database (e.g. view count, like count, reply count).
It makes sense to have a cutoff time if you want to display the latest announcements on your portal. Old announcements have no relevancy. Therefore I want the cutoff time to work for thread creation time. Example: A user replies to an announcement from 2006. This thread is then bumped to the home page. We show the announcements widget at the top of the home page. To get rid of it, I need to delete the reply that the user made. Another example: We migrated from vb to XF. If we display the last X threads, then it will display announcements about vbulletin, which is irrelevant and should not be on our homepage. So I have changed the number of threads from 10 to 3 to hide this. But if I post a few new announcements then I need to change the number of threads again.