The whole point of this is that a toxic atmosphere is being created, where it's "OK" to say things that demean and stress out a particular player.
I think one of the main issues with it once the atmosphere is established is that it is very hard to defend against.
My character can defend himself when things are situated purely IC, but he can't defend OOC statements about him being evil, manipulative, or what have you. Not even *I* can defend such.