Often it's neither whim nor regulations, but simply bureaucracy. Mistakes happen.
Cryptocurrency advocates promise you freedom from everyone else's action, but at the cost of no way to correct mistakes. So if your computer security is ever 100% less than perfect, or you're defrauded by your counterparty, there's no way to recover the loss. (Well, there's legal action, but "freedom from legal action" is also cited as a benefit..)
I was about to argue that cash is just as susceptible to "theft". But then you brought up the freedom from legal action. That's a good point. At least with my dirty-dirty fiat dollars, you rob from me, my "forcefully taken money" (taxes) funds a group of people that will at least go after that person. Obviously, that's not a guarantee. But it's better than a system where it sums up to "Yea, sucks for you. We don't believe in legal action of any form and built it up in a way where you're screwed."
No often it is at a whim of an individual. For instance, as the system is based upon trust and not security, I can transfer $10,000 from your account to mine. There are dark markets where you can do this at a 5% rate.
You can dispute the charge, and an individual will decide whether it is valid or not. That decision, as the author put it, is based upon the relative privilege of the two parties. If I am a weird kid on the internet, the bank will always give you your money back. But what if I am a utility or a city government? You will almost always lose your money without months of beurocracy or legal work. In fact, they don't even have to take it from your bank account. They can merely send you a sheet of paper which says you owe them, and your credit rating (money privilege) will rapidly erode if you disagree with their assessment.
It is not even about crime or errors all of the time either. Have you ever tried to buy a car from a private party on a Sunday? Even with $1M in the bank, you have no access to your money due to arbitrary decisions of local bank branch managers. Buy from a privilleged seller (dealer)? No problem. In fact, they can invent the money with which you purchase it (assuming you are privilleged enough, of course)
Well, my wife was suddenly and unexpectedly locked out of her money for a day just because someone in a local branch fucked up. It's good that it's rare, and as long as the economy is stable in your country you can trust that - but the "as long as" here is the worrying point.
Australia. Yes, there was a line. It was lodged as a fraud reversal charge due to them having another customer account hacked. Payment was made for a sale and cleared from that account. Since it was interbank, they decided to help themselves to the cleared payment, despite my asset already having been sold.
