How do you know the player isn't up to something intentional, for instance triggering some kind of 'outside investors suddenly acquire all of a stock or bond that we think is going to tank in the next five minutes'?

Are stock market players not allowed to divest extremely suddenly, to dump their property at fire sale prices in order to get rid of it at what would be a paper loss, all the while knowing the consequences of holding would be worse?

What if they're dumping equity in a company that will be known to have committed terrorist acts? I'm not sure if I buy 'clearly erroneous'. I also don't buy that the scale of the error was really threatening to Goldman Sachs.

And the rules defining what is 'clearly erroneous' and what is not is intentionally made vague because arbitrage of this clause makes the exchanges money.

In what sense is this “arbitrage”?

They stand as the arbiter of who will gain money and who will lose. There basically is a series of cases 'erroring parties vs Goldman' and 'erroring Goldman vs other parties' and whether Goldman will lose money is decided by an Exchange (hint: they rule in Goldman favor every time, making an analogy with forced arbitration even more proper)