Even sqrt(x * x + y * y) is wrong. I'm slightly ashamed to say that I learned of the C hypot function only a few days ago. I've been doing this wrong for decades.
I would think overflow is a very rare problem for floats; I don't think any code I have ever written would need to handle the overflow case. The more significant problem should be precision loss.
Is the algorithm in [1] significantly more precise for inputs that don't result in overflow?
Edit:
I made a small program to check a few values. It is seems like the algorithm in [1] is better in terms on precision, but only by a small margin (on the small set of values I checked).
Do you have an example where this is true? I have not seen an example with > 2 ulp difference from the true value or > 1 ulp difference between the two algorithms.
(edit: I realize it's in the article, but it deserves highlighting here again. This is a really good book.)