>Here's an example of traditional finance screwing someone over for making an obvious mistake. Where's this ability to reverse transactions when you need it?

It still exists, and note that the case did reach a court. It just happens that the beneficieries were also owed that money, and that allowed them to win the subsequent lawsuit:

https://clsbluesky.law.columbia.edu/2021/02/24/how-the-litig...