But it doesn't.

The ECU (even on shite KE Jetronic) retards the timing at 60 degrees and continues to retard the timing as the air gets hotter.The ECU can correct for something stupid like 150 degree temps!!

Also the reason why the ECU retards the timing is because the as the air gets hotter, the air also expands.

This means that for a given volume, the air is less dense at a higher temperature than a lower temperature. There for the volume of oxygen in the air is reduced making it run richer.

What the reduction in oxygen causes is a different burn rate meaning that the spark timing has to be delayed to account for the slower burn time for the hotter, less dense air/fuel mixture. The reason why it needs delaying is so that the cylinder reaches it peak combustion pressure at the correct time ready for when the piston is going back down.

It isn't dangerous for the engine in the slightest. The reason why we don't really want high air charge temps is because the retardation of the timing costs power and the more it retards, the higher the defecit is on the power output.

On the KE Jet, this retardation makes a huge difference. I certainly notice it on my car after it had been parked up for a while (heat soak).

Hope that clears up a few issues.