The US requires citizens who bear children outside of the US to have lived in the US for at least five years since the age of 14 in order to be able to confer citizenship upon their children (or something very similar; my memory is failing me at this exact mo).

The UK does something similar. There is a residency requirement to be able to pass citizenship along to your children. I believe the assumption is that if you live outside the country long enough (and thus in another country), you are probably very near to acquiring citizenship of that other country if you haven't already and thus this will be the citizenship of your child.

FWIW, the UK has something called "settled status" which is the status of right-of-abodeholders, ILR-holders and Irish citizens (and some other British Overseas Citizens). Although these people are not British Citizens, any children of their born in the UK are automatically citizens.

If they are a citizen of that country, then citizenship will almost always be conferred upon their child even if it is born overseas (NB: there are a few Middle-Eastern countries which do not allow mothers to confer citizenship upon their children if they are born overseas, although such a restriction does not apply to those children's fathers).

There are approximately twelve million 'stateless' individuals around the world. A very good example are the children (and grandchildren) of Tibetan refugees in Nepal and India. They are not citizens and instead are given refugee passports and have refugee status. States with large refugee populations are very familiar with this concept. And it is screwed up, indeed.