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While your understanding is technically correct, it's nowhere near that simple and usually costs more than the money lost in legal fees to win a case like this and get your seized assets back.

The state refunds it to you, the 7.7% percent is the fee the state paid in order to withhold your funds so conveniently. The trick is you have to prove that those withheld funds are wrongfully withheld (the burden of proof is on the accused in this case) without access to the seized assets. In short, the 7.7% is negligible because in the cases of this abuse, you probably weren't getting that money back anyways.

What a great scam!

I need a state sponsored monopoly where my income stream is non-recourse without chargeback possibility.

How much are you willing to spend to get the money back?

Also depending on the method they use to drain the card. What about interchange fees that cards brands charge for transactions?