Yes, that does not look like an optimal design. Part of the problem (with any stranded flexible wire being used in constantly-flexing application) is the way the insulation is stripped. It is usually done by wire stripper with metal blade cutting the insulation. But more often than not the blade also nicks several copper strands, weakening them.
When I need to strip insulation for flexing applications I used to use pointy tip of my soldering iron to melt, not cut the insulation around the wire. That does not damage any copper strands. I then found a thermal wire stripper which does the same thing but much neater. The tool is called Hotweezers. Not inexpensive, but I found it on eBay for an affordable (for me) price. But even without that tool, the soldering iron works quite well. Just make sure to clean off any melted plastic residue from the tip, or it will cause the tip surface to oxidize and unable to be wetted with solder. Best to dedicate a tip just to wire stripping.
Also the type of wire makes a difference. Some stranded wires have a large number of very fine copper strands and a very flexible insulation. Unfortunately most of the time a cheaper wire with fewer stiffer strands and stiffer insulation is used by manufacturers.
In my experience the most flexible wire is the decoder wire from ZIMO and BRAWA. ESU wire is also not bad, but in my experience Digitrax and TCS wire is not quite as flexible.
Adding a strain relief will also greatly reduce the chances of broken wire. When repaiting the connection I would strip a very short amount if insulation and solder the wire in a way to have the unstripped wire as close to the solder point, then apply some 5-minute epoxy (as it is starting to set) around the solder joint, creating a fillet around the wire. The will protect the weakest point in the wire's solder joint.