The recovery bonus is a feature that only exists in Blitz. The design is so that a player who has a bad hole can come back and be competitive and hopefully not quit after a ball into the water or OB.
I can say that if you lost four games to the player who dumped it into the water or OB then the players aren't that good in the groups you are in. If you get the recovery bonus you have lost your green and inside 10 feet bonus. Not sure how this could possibly create a runaway winner unless the person happened to ace the next hole.