Simple reason, the file is read (from my own code) as part of the About page, so the code needs to locate it. I put it in the root folder, and that worked until we created our first Android build, where renpy wouldn't include the file in the APK, so for Android, we moved it to the game folder and I changed the code to look for it there on Android.
Could we have put it into a different folder? Surely, but it worked like this and I think the renpy folder should be for Ren'Py internal stuff, not game related files. Could we have put it into the game folder for all builds, not just Android? Sure, but I prefer to have it in the root folder, as license files should be.
In the end, this works for all our official builds, but when you use the non Android build on Android, the game looks in a different folder and you get that error message (which is there because otherwise you get a way more cryptic error message, and also because people creating ports or compressed versions in the past dropped that file and as the error message reads, you're not supposed to do that for legal, moral and technical reasons.