Why put a lunar reactor away from the habitat?

Answer: Distance lowers crew radiation dose

Distance lowers crew radiation dose ✓ — Correct! One of the simplest ways to protect crews is distance. Putting the reactor away from living areas lowers radiation exposure, and designers can add shielding or even use local regolith and terrain to help protect habitats.

Short cables waste too much power — Not quite. Power transmission does matter, but short cables are not the core reason. The main reason is crew safety: separating people from the reactor reduces routine radiation dose and accident consequences.

The reactor must stay in sunlight — Not quite. A fission reactor is attractive precisely because it can operate without sunlight. Its location is chosen for safety, deployment, heat rejection, and infrastructure layout, not because it needs to sunbathe.