I am really shocked this was moved to the accepted bugs section. I also tested this and the range is actually shorter than you think. Stoneskin is a 25y spell so we placed a party member at max range of stoneskin to confirm distance. Had them switch from WHM to warrior and the fairy would not heal him. Had him switch back to whm and stand at max range for medica 2, which is a 20y spell and the fairy began casting embrace when he switched to warrior.

As it stands, I often use this to place my fairy out of range of one tank to prioritize heals on the other. I'm not sure how retooling the spell will affect current game play.