It's a question where you build that wall. If you build it around the home of your immediate family and keep almost everyone else out then you can hardly be said to have a high trust society. The goal should be to put only those bad actors behind a wall, preferably a physical one.
Yeah, gated communities like that are usually a clear sign that something bad is happening with the given society - or in a minor cases with the community, if it needs to gate itself from a society that is not failing.
Sure, but that's a completely different discussion.
Plus that even with such a small scale of the "inside", the thing fails gracefully. It is arguably a failure mode, yes, but it is one that leaves a functioning system (albeit one that stays below its potential).
This is not true for the inversion of the scenario. That does _not_ fail safe but just leaves rubble behind.