I use the alien drill and I like to be precise, it really feels like I have to stop what I'm doing, and then start doing it again
But... you
are stopping what you're doing. If you're deactivating smart cursor, that means you're not smart-cursor-mining. So you have to stop doing what you're doing and start doing it again.
It sounds like you use smart cursor a lot too
No, I don't. I use it when I'm mining through terrain to get from point A to point B in a straight line. When I'm trying to extend a path, I'm using it, but even then only sometimes. And I use it to fill in walls in houses. But that's pretty much it.
I don't use it to mine ores, for the most part. I don't use it to build most housing or other constructs.
I use it in fits and spurts. There maybe a 20 second to 2 minute burst when I need it, but then I'm done. Being able to take my hand off the keyboard for that 2 minutes is good. But I'm not going to go into a menu and select an option and then have to remember to turn that option off once I get done. Not for something that's only going to be a minute or two.
I use it far too intermittently to be something that I want a toggle for.
I suppose I'm also asking how are forgetting smart cursor is enabled when you can see the yellow block?
When paying attention in Terraria, there are at least 3 things you have to think about: where you are, where you're going, and where the cursor is (because that's where your action will be directed). Adding a fourth thing into that, like looking at a yellow box, is adding unnecessary complexity. Especially since there may be enemies about, and you need to pay attention to them too.
So I don't notice it.