While I would like to agree with that in principle, I must disagree.
This cannot be Institution dependent as it is highly instructor dependent. There are some faculty colleagues here who have done away with any notion of a due date (it is mentioned but it does not mean anything). Most don't run their courses that way.
However, the default case should be something that does not do violence to the notion of a due date, and removes any possibility of unfairness. Let us take two worst cases:
1. Due date = cut off date is adopted as a default in a place that allows late submissions as a matter of course. End result of an instructor misunderstanding the meaning: inconvenience for the instructor and students.
2. Due date = malleable, cut off date = actual hard stop date as a default in a place that does not allow late submissions as a matter of course. End result of an instructor misunderstanding the meaning: unfairness for the students as soon as some students figure out the loophole, and resubmit their assignment after the instructor releases the solutions (usually on the due date).
Shall we weigh inconvenience vs unfairness and a complete ethical disaster?
It is clear that scenario 1, though it runs counter to the current Moodle practice is the safer option. I am not sure if I can explain this better than that.
My experience of two countries (US and India, at least in engineering) suggests that the due date is the due date - if you want a late submission, make a special request. Maybe it is different in the UK/Australia/elsewhere.