The risk is not precisely and exactly quantified. The uncertainty isn't precisely quantified. This isn't an experiment where someone is asked "Would you like to have $2, or flip a coin and get $5 if its heads, or roll a die and get $16 if it's a six?"
I think it's more about how they are estimating risk in different areas, and ways in which one might commonly see people overvalue or undervalue risk, or overvalue or undervalue potential payoffs. It's not that they're trying to be more conservative, their incorrect calculation just makes one option seem like a bad (or worse idea) than another.
An alternative viewpoint is that maybe their risk calculation isn't actually wrong and they're not risk averse, they're just taking the strategy of only making decisions that don't make you look foolish and can be blamed elsewhere if you lose, but can take credit when you're lucky and they win.
Saying yes to 2$ over a coin flip to $5 is risk aversion. Saying no to $3 so you can coin flip for $5 is probably just foolish.