1. The default terms are exactly that. Default terms. They will be discussed with clients before a project starts, and we will negotiate terms that suit us both. Think of it like asking for all the brown M&Ms being removed from a rockstar's rider. If a client is unwilling to discuss terms with me or unwilling to negotiate for their project, then either the project will proceed with these terms, or I may refuse the project entirely.
2. The actual wording allows me to implement the penalty at my discretion. I've had a couple of late payers, and often just the mention of the penalty will prompt them to pay. I'm not trying to destroy client relationships here - I just want to get paid.
3. A penalty for late payment isn't the only protection; that would just be stupid. Aside from contracts, I am very willing to refuse working for clients who I don't trust to pay on time.
4. This isn't something that I will just spring on a client at the invoicing stage. Yes, it's copy on my invoices, but that's there to remind clients of the agreement.
5. Negotiation is important. I realise that this is a re-hash of point 1, but it bares saying twice. I have contracts with different clients where different terms are enforced. The point is that these are default terms, which are there to protect me and my business. They are my starting point for negotiation. So long as you don't come at me offering "I promise to pay you on time" as a point to negotiate with (you can't negotiate with promises that you should be keeping anyway), then we'll figure out better terms for both of us.