A couple people here had a misunderstanding.
Assuming that any of the parties do not agree on anything , everything is frozen.
The money gets deposited in the shared wallet after both parties have provided collateral.
If they have a dispute , such as 1000$ is not received , both parties have their collateral stuck along with the 1 BTC stuck in the shared wallet.
Surely , the bitcoin seller has a bigger loss in this case , but the buyer has a loss too.

Now what I don't get is how will funds from both parties be simultaneously be introduced into the wallet ?
( not too much knowledge about technicalities )