I don't see the problem. fminsearch is also able to expand the simplex. Also, not starting it out from zero can help. If it uses a 5% relative simplex, then the initial size won't be so tiny.
As far as going out of bounds is concerned, why worry? The bound constraints already in fminsearchbnd prevent a sample point from going outside of the bounds. There is no need to use linear constraints, as all they will do is slow things down a bit.
Always be careful in modifying supplied code.
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