I believe that if the developer's bid is accepted, the money goes into the 'escrow', which is the main purpose of the site: make sure that the developer does not go unpaid if he did the work.
If the customer is not happy, there are some sorts of resolution processes that I don't know much about.
What surprises me is that the clueless developers also had high 'reputation' (positive customer feedback), which should be at least some indication about their competence.