That's actually a watered-down version of what Kickstarter had before, with significantly less protection for backers. Previously the ToS said creators had to give either the rewards they'd promised or a refund. Kickstarter made a big deal about protecting backers a few years ago after ZionEyez took a quarter of a million in backer funds and then disappeared to a tropical beach never to be heard from again, then quietly removed those protections and more after the heat died down.

Not requiring a refund does seem somewhat reasonable. It's not as good for the backers, but won't terrify the companies being funded with a super-massive liability.