It could scare away devs, but GOG could just reverse the policy. They're trying to strike a balance between devs getting their due but also for consumers that either don't like the game or find it's buggy/incompatible/etc.

I see GOG canning this policy quickly if any devs threaten to leave over policy abuse.

I remember when EB/Gamestop had the policy for PC games.  I only ever used it once because a game was really bad and buggy.

Sounds too generous, but this mainly applies to games that aren't already pirated, which should be few.

This is quite generous move from GOG. However, this kind of generosity might be misused by many. Since, all GOG games are DRM-free, people can just buy, take the DRM-free files from the game, then ask for refund. Of course they're not eligible for game further updates, but still, this might scare many game developers.