I don’t see a reason for that. They didn’t beat him, they don’t deserve his place.
I don’t think timeout deserves a punishment. We could just do nothing against timeout in a ladder.
The winner takes his new place and it’s all.
The only reason for kicking off people is because they don’t actually play at all. There are a lot of players who subscribed the ladder, played for a while and then forgot about it or simply stopped playing but didn’t drop off.
This is an issue because they remain in their place forever. They will take years to slowly fall down naturally. In that time many other players could challenge them just to find out they didn’t get an actual game.
We can’t check constantly thousands of players for their activity so the check is left to challenges: if the challenged is inactive he will be kicked off, thus cleaning the ladder.
The so called reprieve is just because there’s no will to punish timeout in itself. Otherwise all games by the timeouterer should be forfeited and what you said would happen.
But that isn’t the intention.
Well, it’s quite harsh if you don’t deserve it!
I did that intentionally a couple times just because I was bored of lying on the same ranking, being unable to climb further.
It can even be funny and challenging if it’s your decision.
But if you just lose a game because you had unexpected problems irl, it doesn’t seem fair to be punished like that.