Typical real world derivatives contracts dont just disappear when someone runs out of margin typically they have a predefined expiry date or other specific underlying price-related clauses that allow early close-out. As a result, if your counterparty whoever is on the other side of your trade fails to keep their margin collateral balance positive, you face the risk of default. You might not get paid what youre owed, as stipulated by the terms of the contract!
The main factors driving the decision between centralized and decentralized derivatives trade is counterparty default risk and contract standardization/fungibility benefits.
This centralized vs decentralized tradeoff exists in the current derivatives world, as well. The decentralized approach, where traders deal directly with each other on custom terms, is common for major financial institutions.