Why are users allowed to connect to SQL Server when creating sql account, that defaults login to 'master" for login
All logins exist in the master database. Why it is default is probably related to this, but you can change the default database to your user database if you wanted to. The default being master simply means they have to explicitly set the user database in the connection string for the application. 

The default database has nothing to do on why the logon can connect to the instance. This comes from being granted connection privileges to the instance. This is done by default when using SSMS to create the login. 

Additional Info

Public role is granted connect permissions and any login created is automatically part of that role. 

The only permissions granted for every endpoint is Connect. The only thing they get at the server level is view any database.


 

You actually cannot remove a login from the public role either, SQL Server does not let you because it is hard coded in there somewhere. You will most security standards for things like HIPPA or DoD (STIGs) want you to simply harden what the public role can do at the server level and within each database. See "INF: SQL Security - Restricting access to public..." for a bit more information on it all.

Creating a login straight from GUI or from just CREATE LOGIN and you will automatically see these permissions at the server level: