It took me a little while to parse and compress this article for understanding. Here's my output.

Conflating tolerance, freedom, free market, mediation, and algorithmic rules (deterministic law) for a tree-level view is ambituous. Tolerance can be related to mediation in the sense they allow resolution when there has been an error. Freedom is a right which is different from an error (like tolerance) that's allowed. Conflating freedom with free market threw me off, but I guess they really are deeply related. This is my interpreation of how these ideas can be conflated: "We have the freedom to conduct free market txns within legal bounds, tolerating errors in the pre-txn sales/buying pitches, and resort to arbitration when errors that law could not detect and correct exceeded our tolerance."

Dispute resolution is about deciding things that the algorithmic rules could not determine. It seems to be based on selecting an oracle who, almost by definition, can make errors (because he's to decide situations where the truth can't be determined). So it must be off-chain which seems to require a free market of mediators. The rules that create the mediator market can be determined by the same people (ideally all stakeholders) who determine the rules for the primary market. Both markets are algorithmic but the mediator can override primary market. The primary txn and the mediator were free market choices the parties made.