It is a strategic decision, true, but its a terribly ahistorical one. People ALWAYS settled in the flood plains and beside the volcanoes, because people take the certainty of fertile farmland over the uncertain risk of some horrible disaster. Then to hedge their risks, they erect places of worship to appease the gods so that they don't punish them with floods or lava. And why wouldn't they settle in the flood plains and close to volcanoes? If the gods are going to get them, they'll get them wherever they go, so only an idiot would pass on prime farmland.
EDIT: come to think of it, if you wanted to keep natural disasters in and you want to give player agency to it, you'd be better off giving players a chance to reduce the chances of natural disasters:
- antiquity and exploration ages: shrines and temples reduce the chance of natural disasters in their area
- modern age: science buildings reduce the chance of natural disasters in their area
In fact, many of the earliest cities in Mesopotamia were started in flood plains, and cities like Uruk (one of the earliest and biggest) were formed around two temples on artificial hills ('proto-ziggurats') that were already there because the earliest farmers/settlers needed the Gods' help against flooding.
And Etna in Sicily has been in near-annual eruption for at least 5000 years, and people have been settled all around the base and lower slopes of that mountain the whole time.
What's a little natural disaster among friends?
On the other hand, to make the natural disasters in-game more balanced, there are positives that could be built into them to counter the negatives.
Volcanoes almost all had a Religious Component: Fiji, Tahoma (Rainier), Etna, Thera - they all were affiliated with Divine Powers and could be so modeled in game. Extra bonuses from Altars/Temples and other religious structures in addition to the very real extra productivity of the soil.
Volcanoes were also a source for Obsidian, one of the earliest Trade Goods known that acted as a substitute for early metals as well as being a component of jewelry. The Romans, of course, made a very good thing out of volcanic ash as a component for their early cement/concrete, and they weren't the only ones: Assyria built the Jerwan aqueduct in 688 BCE using volcanic ash mixed with kiln-baked mortar to form a waterproof concrete, so that construction material isn't even Uniquely Roman. At the least, a Production Bonus from Volcanic soils is also a possible positive effect.
Flooding from Floodplains, as modeled in Civ VI, greatly increased the productivity of the soil by refreshening tit with silt. But in addition, floodplains also provided specialized materials. Reeds were an early construction material, being used for river and coastal boats (reed bundles float!), roofing, partitions, and other non-structural components of housing and other structures. and, of course, specialized reeds like the papyrus could provide specialized bonuses to education, administration (the majority of papyrus sheets found are covered with administrative 'paperwork' in Egypt right down to Roman Imperial times). Marshes, wetlands or floodplains were also home to a massive concentration of fish and waterbirds, a major source of non-agricultural food/protein that might best be modeled as an increase in Happiness if the game doesn't include a Health component directly.
So, at the very least, the two most common situational (permanently shown on the map) Natural Disasters could be muc better modeled if they are going to be included. Simply negative random events are both simplistic game design and will be resented by many gamers.