The "nobody dares giving bad feedback" thing isn't about retaliation (though I suppose that could happen). It's because perf is actually the worst place to provide "honest" feedback to a person about their performance.

It's complaining to managers/directors instead of talking to the person themselves (the recipient wont get to read your feedback for a couple months after). Even if you want to talk to a manager about some performance concerns, you should do that directly, instead of putting it in a record that sticks around for a persons whole employment

It's a bureaucracy game, and people who give bad feedback don't know how to play.

(I'm not endorsing the system at all, just rejecting the idea of it being retaliation-based. Anybody giving bad feedback doesn't understand what is going on)