Allow more than two reference points when georeferencing cad files. Make it more like georeferencing an image. Make it so that you can use unlimited reference points.
If you are not going to allow more then two reference points, then write an pop notice instead of allowing ArcMap just to crash.
The georeferencing quality of CAD drawings can be arbitrary if the links are limited to 2. In some cases, you may not have exact target features, e.g. when referencing floor plans to cadastral maps or aerial photographs. In these cases it would be helpful if the georeferencing can be improved by using more control links and averaging the parameters of the transformation (as in transform, but maintaining the properties of a similarity tranformation).
The limitations section of About georeferencing CAD data—ArcGIS Pro | Documentation explains that this can be done by bringing the data into a geodatabase and using Modify Features (Transform which allows other methods).
"The purpose for georeferencing a CAD dataset is to accurately overlay the CAD drawing with existing spatial data without skewing its geometry. If a more complex transformation is needed, you can load the data into a geodatabase and use the Modify Features pane."
I suppose the idea then is simply so the data doesn't have to be loaded into a geodatabase first, correct?
not quite - not having to load the CAD drawing into a GDB is just a side aspect (of convenience). The main point is to get a better similarity transformation (not sure about the correct mathematical terminology - the same type of transform which maintains aspect ratios). Better meaning a better overall fit, not just fitting 2 control points.
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