Honestly, it sounds like an offer that banks should be prohibited from making by banking regulations, not something the counterparty should be punished for accepting.
Maybe, but that's probably not happening, and we already have a mechanism that heavily disincentivizes it: make risky deals that go bad and you only get the money that was insured, but not the risky deal-part.
It's just that we've decided that this time the risk mustn't be carried by those that profited from the deal.
