In a previous life I attended a 4day course run by a Royal Navy investigator who helped to piece together the causes of the Piper Alpha Disaster.
Lockouts (or lack of them), Registers and shoddy hand overs between shift changes had an absolutely massive contribution to the disaster.
I've also witnessed a few nasty things happen in engine plants and factories when Lockouts were mis-used by someone who thought they knew better.
It sounds like your customer has found a short cut.
It will eventually bite someone on the bollocks.
Of course management will then say they had no idea this was going on.