I agree with your second sentence wholeheartedly [0]. Running with that, wouldn't it be better to be less forced into market dynamics? Or at least less oppressive ones? To me, that is what capital being distributed means. Say you own your own home outright, rather than renting it from a bank. That gives you a certain kind of freedom where you're not trying to make a huge mortgage every month (or at least not nearly as much, you're still paying the town rent every quarter), so you can spend less time earning wages from the financial system, and direct your efforts to non-system-legible endeavors - for example your restoring the biosphere outside of profit motives. It's the financialization of everything that drives the lifestyle inflation ratchet - since most of one's income is mandatory to service debt, one might as well have nicer things, right? Whereas without that stress, the incentive to keep earning more at the expense of accomplishing meaningful things just isn't there.
[0] With the caveat that I also see the opposite side of the coin about the utility of market signals. Both critiques are valid.