I don't think this is what the GP is talking about.

Think of this scenario: Suppose I got an online token/contract/NFT on any Blockchain that says I own the property and house at 123 Main Street and further suppose this is as verified on the chain as it can be. No doubt about it.

Then when I show up to 123 Main Street there is already someone living there with a different claim (let's say a classic deed in some government real estate database).

Then the police and the courts get involved and at the end of it one party will be removed from the property, by force if necessary.

This is what the GP meant with trusted physical party. The entities who IRL decide and enforce which of the many competing "proofs" of ownership are actually legit.