It is still a PoW coin under the current design because masternodes don't really decide anything important. They just sit around, stay online or pretend to be online, and collect interest (and possibly cause real trouble if malicious). In the proposed Evolution design that apparently changes, but it is hard to comment meaningfully about vaporware.
Hmm, I guess having the masternodes locking transactions in seconds counts as "just sitting around".
First of all, masternodes will still be paid even if they don't serve lock requests. They're not being paid
for performing the service. They are being paid
and they perform the service, if they feel like it.
There isn't even a system to politically vote out bad actors as there is in Bitshares. In Dash any masternode operator who figures out how to cheat can get away with it indefinitely.
Second, the miners will just ignore the locks if they are more than six blocks ahead. All that requires is a big-ish farm get disconnected for 10 minutes, some luck in mining and propagation, or a deliberate attack, or probably some other scenarios I don't feel like trying to think up.