Here's an example that isn't clearcut bad for the player, but a really unhealthy loophole in general.
In the rule 5 draft after the 2016 season, NY left 20 year old catcher Luis Torrens unprotected as he wasn't anywhere near ready, he had barely played in low A at that point. So the Padres took him and kept him all season to get his rights, he was a total waste of a roster spot of course (.446 OPS in 139 PAs), but they didn't care.
So, in a way, good for Torrens, he got a year service time, a $550K salary, and lifetime benefits all at 21, but now this year he is back where he belongs, in high A ball at 22 (and still not really hitting there). Maybe you could argue that the year of major league instruction makes up for the lack of game reps for a year, less than 700 career PAs coming into this season. I guess we'll see but that doesn't seem right.