Surely you wouldn't explicitly write break Default::default() under this proposal unless you wanted to conflate the two cases, but it may be the case that you do break val where val happens to be the same as what Default::default() evaluates to, and later code mistakes that value for the case that the loop was exhausted. This is precisely why we have discriminated unions in the first place.
Or it could be resolved by making for loops always evaluate to an Option<_>. It will break compatibility, but that can be easily handled with an edition change.