I've done a couple of Avis rentals in the US recently and noticed the same thing: if I put in US as my country of residence, I got a lower rate. Interestingly, I've never been questioned about it either.

All it does is make my rentals take longer, since I can't use my Avis Preferred membership but instead do each rental from scratch. Seems to me that the only thing this policy does is waste my time and Avis's.