I feel like the problems you're describing are more workplace specific and not specific to the method of CR itself. For example,
> They started humble and ended afraid to do anything except simplest tasks.
It's the job of the team leads to create an environment where people (especially new people) shouldn't be afraid to try something out and learn from it. I've had plenty of CRs which went for some huge number of iterations when I first started, generally this was solved by spending some time thinking about designs on my own and then having a meeting with senior devs to discuss pros/cons and any suggestions before writing any code.
> Also, they got only and exclusively negative feedback.
This sounds really shitty, and this seems like a problem with the people on the team. I always try to put at least one positive thing in a CR after lots of criticism, and if there isn't that much criticism even better!
All in all it sounds like with or without CR, the team you're describing probably wouldn't be a pleasant place to work.