They say the fenced mag release area was built up because of brush and other things could depress the mag catch whilst in the field.
Personally I have carried the early XM16E1s and the latest M4s under the most harshest conditions here in Australia. I have never encountered any mag release problems at all. As for cosmetics, I reckon the fenced one looks great.
After nearly 40yrs service in Australia, those original early purchase and lend/lease XM16E1s are still in service. Now thats quality engineering! All though the standard issue rifle here is the F88 Austeyr, M16s are still found in service, as over 4,500 are still held in stock, and are in constant use.