Back in the old days when one used the X11 Ctrl-Alt-Keypad+/- combination to switch screen resolutions, the mouse would pan the viewport only when you moved it to one edge of the monitor(s) and then tried to continue past. The current behavior of the "Alt + Mouse wheel" zoom used in XFCE has it continuously panning the viewport with mouse pointer motion. This it makes it very difficult to actually use the mouse while the viewport is zoomed in, especially so if the user is zoomed in rather far. The further in you zoom, the faster the viewport pans around when the mouse is moved, making it hard to follow the screen. With the old behavior you could "zoom in" and move the pointer around in the visible area to literally point something out, for example, or just move the mouse out of the way. If you wanted to see other parts of the desktop, you just slid the mouse up against a screen edge and panned. This behavior is impossible now because the viewport always moves with the pointer. An option to switch to screen-edge panning like this old X11 feature used would be most welcome.
Unfortunately, I reckon what you ask for is not possible. What happens when you zoom is that the actual location of the pointer remains the same as when normal, this is why it's the image that moves along with the cursor and not just the cursor that moves over a static image. The pointer location always remains the same. The reason for this is that it's not possible in X AFAIK to set an input matrix (required if the coordinates of the pointer where to be changed) on a relative device such as a mouse (as opposed to absolute devices such as touchscreens or touchpads, when set in absolute mode -default being relative-). Beside, tbh, even it was possible I do not think this is the role of the window manager to play with input devices. In X, a window manager manages windows, that's it (unlike Wayland compositor where the compositor plays the role of several different counterparts as found in X world). That zooming functionality in xfwm4 is an accessibility feature, it's not a general purpose quick resolution changer as the feature your refer to. Note that the "good old days" as you say it are still there ans the option in X you refer to is still present, so if that's what you want I'd suggest to take this path instead. *** This bug has been marked as a duplicate of bug 11711 ***