That is the default, but with LMCE my understanding was that it should only be serving the internal network, not the external network. That is one of the points of having the networks partitioned, so that the LMCE network doesn't interfere with any existing network. And this is the way you are supposed to be able to have your external network served by your, say, broadband router's DHCP server, whilst LMCE serves the internal network.
1audio - you are right about this messing things up! And yes potentially you could end up with it passing out "non routable" addresses if it wasn't for the fact that for every interface that is listening you need to have a "scope" setup that responds to local broadcasts and has an IP range for a subnet that the LMCE interface itself resides on. That ensures that the "external" client can always talk at least to that interface - ie no need for routing which is essentially what you concern was about. Otherwise it could end up on an islanded subnet with no accessibility to a local router that could get its packets off that island - because the correct router for that range is on the other side of the LMCE box, the internal interface. Each interface can also have any number of other scope definitions for remote subnets. Those remote clients can't broadcast to the DHCP server because these broadcast can't leave their own subnet. But the router for that subnet can see these broadcasts, and can have an IP Helper setup to tell it where the DHCP server is. It then unicasts the request to the DHCP server with its own IP address as the source. The DHCP server then infers the subnet that the client is on from the router's source IP address, and if it has a scope definition for that subnet it will respond back via the router to the client with a lease.
BTW, there are ways of fudging it so that 2 nodes on different subnets can communicate without a router as long as they are physically and logically on the same network segment, but you don't want to go there!