There seem to be a lot of things like that in the USA, where if it happens even once or briefly, it screws up your life long term. Homelessness, poverty, seeking mental health help, arrest, prison, bankruptcy, a medical emergency. Every application form with a checkbox that says “Have you ever...” perpetuates this “gotcha” long-term punishment. Why does society insist on setting these traps for people?

Because everyone just cares about covering their ass and washing their hands. See all the comments above in the venue of "well, they're following the law, what else do you expect them to do?":