It should never allow you to reemplace a transaction, or to change outputs,
it should allow you to give more priority to a transaction that it's stuck on the limbo of 0 fee/smaller fee transactions.
Only replace the transaction if it's the same transaction with bigger fee. to the same outputs.
Any other thing is not bitcoin, btc is not reversible.
or you just killed satoshi dice.
Zero-confirmation transactions were never safe. Note that Satoshi DICE apparently waits for confirmations, on higher value bets -- an admission that SD themselves know zero-conf are not safe.
However, with regards to transaction replacement, it should be noted that it introduces race conditions that increase non-determinism.
The first step towards improved determinism is, instead, making transactions
expire after a certain amount of time in memory pools, without being mined.