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As of Alpha 20, but possibly earlier, the Nuclear Fallout Zone no longer exists as a biome and thus this dirt is no longer used either. The fallout zone is still present as a radiation field on the edge of the map, but it instead uses whatever biome is in the area.
Radiated Earth acts as the boundaries of the map.
Radiated Earth is a scavengeable resource. As of now Radiated Earth serves no purpose.
You may place Radiated Earth outside of the Nuclear Fallout Zone and move around freely on it without getting harmed as it appears the biome itself is responsible for the damage and not the ground you may walk on.