Done properly, really properly without system cock-ups, and provided they use the short window during and after the ballot to weed out the nonsense applicants, I think this is fine and fair?
Some specific use cases will lose out as above, but others will gain as is always the way. You can pick 2 preferred areas AND specify if you want to be considered for other areas if your 2 choices don’t win. Specific seat picking? I think most applicants will be happy to win tickets and all seats in an “area” will be great.
What happens if a group of Plus members all enter the ballot for everyone in their group, then if more than one of the group “wins” some of them can just back out before payment? Will they track that an applicant has already been added to a different members application? Should do. My golf club’s app can stop me booking a tee time if I’m already on another group that day set up by a different member.