The Moonbeam Protocol makes a clear distinction between a simple rejection and a formal ruling of cheating. When a transaction receives a bad grade, the buyer is granted a refund and the seller gets their deposit back. Confiscating those deposited funds is only possible if an arbitrator issues an official cheating finding. Currently, this arbitrator position has not yet been assigned. You can find more information regarding this process at https://moonbeam.network/docs/state-machine