Duplicati fails deadly?

In a number of situations: yes.

Some (probably more than you would expect) users set retention policy default to “Keep 3 backups”. If a source folder is renamed and the backup is scheduled to run daily, after 3 days you end up with having no backup of one or more of your important source folders.
In that situation it’s better to have an older backup of all sources, than a recent backup that misses source folders.

Too bad that the default setting is not optimal for your situation, but others may profit from this default behaviour. Duplicati is designed in such a way that it can be adjusted to virtually any situation. The mentioned –allow-missing-source setting, the built-in reporting options and the external services Duplicati-Monitoring and dupReport could help detecting and fixing problems when a source folder is missing.