That might be one of those things that works well in the short term but may also have severe tail risks.

I heard a similar story about an algorithmic stablecoin called Luna (I think). The analogue of difficulty adjustments there worked fine until one day it didn't.

They can ultimately change the code if needed. Luna also tried that IIRC.

Indeed, one can "change the code" to do anything... including things like increasing the bitcoin supply arbitrarily. Bitcoin's scarcity is a social construct that will be changed when the people who control the nodes want to change it.

Luna was a very different situation, it was nothing to do with difficulty adjustments.