That's terrible for the player, what if you stuck in sh!tty situation with no way out?
You aren't stuck though. You can sign elsewhere, you just can't get as much money.
What happens when a team designates a franchise player and then uses the remaining cap space to sign other star(s)?
Then things would get interesting. What if you are a squad with 3 or even 4 young stars (see OKC 4 years ago)? There was nothing wrong with the system that allowed you to pay everybody what you and they agreed they were worth, unless you are an owner that is.

"your guys"
& went to four straight finals