All it takes is for one bad apple to not install them correctly or use badly defected ones, and boom, people drinking water they should not. Sometimes, regulation IS the answer.
It’s a solved problem - backflow prevention devices will not let water from one user to flow to others, with inspections, etc there is no issue. Want recycled water? Pay for inspections and protective devices. Business users have been doing this for years.
A given property has one potable water entry point - the water meter. So no, it’s not one bad apple and all get bad water. Also, there is no regulation here, just fear of liability by water boards.
A lot of domestic water meters have a simple backflow prevention valve built in.
Though most of them are not easily testable like the commercial connection backflow prevention valves. If the property has non-potable water as well as potable water under pressure, then one or more commercial grade BPVs are necessary.
A given property has one potable water entry point - the water meter. So no, it’s not one bad apple and all get bad water. Also, there is no regulation here, just fear of liability by water boards.