basically every downside of a traditional custodial lightning wallet (centralized, permissoned, being spied on, starves miners etc.) but now they added an expensive escape hatch. 

you can unwind your virtual UTXOs to L1 if you know how to use the dev tools and can pay for the fees. there's a small chance that they can collude with people who sent you money in order to steal from you, but they think it counts as self custody. you have to trust that both parties don't collude. they can also theoretically refuse to process a payment leaving you with no choice but to exit. 

they had to create a centralized ledger in order to make it work. arkade is extremely similar. you cooperate with the company in order to keep tweaking presigned transactions that might never hit L1, and these are used to back virtual UTXOs. you can surrender these to the company and they will make lightning payments on your behalf.