This is a good start, but still not impermeable.I didn't say impermeable, I said good-enough. The loss in practice would be far lower than with credit cards.
(for example, by refusing to propogate word of the transaction at the vending machine)No, the vending machine talks to a big service provider (aka payment processor) that provides this service to many merchants. Think something like a credit card processor with a new job. They would have many well connected network nodes.