I got you. As you say, it should work fine with falloff. But … looking more closely at your screenshots, I see that you’ve got all of your clones (the top nulls) in exactly the same place, which is why the falloff is affecting them all the same way. In order for mograph to adjust the clones’ positions individually, mograph has to establish the position of the objects.
If you can post the scene file I’ll check and see if I can find a workaround.