It used to infuriate me too, first time it happenned I almost put my phone though the wall. However, when you really think about it in the long term health of the game there is really no other way to keep the game challenging.
Think about it this way, if I could win PFs by Time Out I would just make a team of Dream Band, Splitting Image and Kill Joy and just AFK my way to a 300 streak.
I do however think there should be a better way to communicate this to new players since it runs very counterintuitively to traditional fighting games and is quite a shock the first time it happens.