Plus, there will always be people who will exploit hard coded loopholes in the system where no sane, logical third party official would.
The first thing that comes to mind is various ‘police agencies’ in MMOs. Way, way back in the Ultima Online Beta, you’d be walking through town and another player would come up and attempt to pick pocket items out of your inventory. If you turned around and smacked them, the guards would spawn and instantly kill you, which caused everything you were carrying to fall to the ground beside your corpse, and then the thieves would just pick up anything valuable and walk away free and clear. They were counting on this behavior of course, and they’d antagonize new players until they got what they wanted. There was a similar example in EVE Online, where pirates who knew the system would open up floating cans left by players who were mining, causing them to flash red to the miner. If the miner fought back, the police would show up, your ship would be destroyed, and the pirates could pick through all your stuff.
Given OP’s example, I can guarantee scenarios like this with Smart Contracts will be fairly easy to pull off.