I agree, but we don't know in what context the safe word existed. If this was a no limits relationship, the safe word may have only existed for the sake of new types of play in which they were both inexperienced.
This is true. Usually, the reason for having no limits is that the couple know each other sufficiently well to trust that they have the same basic limits and, therefore, no limits will ever be breached.
Maybe she was commanded to get him something to drink, and she had just painted her toenails.
Do you allow them to be used to get out of punishment? You brought up a good point, though. Maybe after 2 swats, she used the "yellow" safe word, and he determined that she could take some more without any permanent damage.