I think it would be more likely to be abandoned, in my opinion. However, as you have said, it is a guaranteed contest and it's the CH's money. Other sites, they may not have to pay when abandoning, or maybe they do -- depends on the site. However, the point is, it's their money and their choice to do whatever they want with it. I don't think it's fair to creatives to be compared to another site or other people offsite -- especially if CHs can utilize examples in the future of comparisons of both to possibly make a negative connotation about SH. Although, how would SH prevent such? They wouldn't have known about this specific occurrence had you not brought it up; they know the possibilities of such are there and it's been discussed in the past in other threads when similar has happened, but SH is focused on this site and this site only so wouldn't know when it does occur. Not sure how they would prevent such either.
I know that I, as a creative, upon noticing such (as in, if I were in your shoes) I would not participate in said contest. Just a personal preference. Domain hunters have been known to run contests on multiple sites to get thousands and thousands of ideas to be able to register them as-is or alter them minutely and register them to make big bucks. Because of this, many of us have 'tells' or 'signs' we each look for that seems like this may be the case or to just be more proactive to protect our own IP as well as the IP of others. Not saying this is the case, but it's other issues about it as well. What would they do with the names? What is their intention? Why are they doing this? Too many unanswered questions.
Guess ignorance is bliss, in most cases, since I don't go looking for this or don't stumble on it really at all -- I don't actually have to think about it when participating. But, if I do stumble on it -- I wouldn't be entering it, personally. Not that the CH is doing anything wrong at all, it's just a personal preference because everything stated herein as well as other unstated factors.