[CRConrad]

> My point is that Upwork not creating the problem, just passing along the problem.

Yes it is Upwork creating the problem: They didn't vet their client.

> From what the freelancer says, Upwork would have eaten the loss if the freelancer had actually used that monitoring software. But he chose not to.

That's not how I read it. That software is to ensure the freelancer doesn't scam the client. They tried talking about that first, but then the freelancer gave them testimonials from the client that he had indeed performed the work, which AFAICS closed off that avenue.