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Judging by the video, the swinging weight is used to provide all sorts of acceleration: forwards, back, and to lift the payload.

This is a smart usage of a dead weight (batteries) that makes all the other motors smaller and lighter.

Cover it with a hard plastic skirt at the max range of motion.

>The counterweight swinging seems like a major hazard.

Seems like an easily enough problem. Basically every car out there has reverse sensors...

You are assuming that there are people around to be a liability. I am assuming there will be no people in this warehouse.

The people will always be there to restart the system and clean up the accidents. Robots have to be designed in that in mind.

Restarting systems and cleaning up seem like jobs that can be/have been automated.