Thanks Wolfgang.

Is this expected behavior? I'm very much confused with my second example:

\setuppapersize[A5][A4]
%\setuplayout[location=middle]
\setuplayout[location=middle,width=middle]
%\setuplayout[location=middle,width=middle,backspace=2.5cm]
\usemodule[ipsum]
\starttext
\showframe
Hello
\stoptext

With just \setuplayout[location=middle] the left margin gets outside the left edge, there's also a gap to the right of the right margin and, to the eye, it seems that the sum leftmargin+leftmargindistance+textwidth+rightmargindistance+rightmargin doesn not match the page width.

With \setuplayout[location=middle,width=middle] all is symmetrical but the two margins go outside the edges.

With e.g. \setuplayout[location=middle,width=middle,backspace=2.5cm] I can fit everything by manually adjusting the backspace to I'm not sure what the right value.

I couldn't adjust the page layout on some more complex document, so I'm going back to the most basic layout and trying to make it work on the simplest document possible.

JG