Liquidations happen when some fool is overextended and another party can buy the position. Since the same people own Abracadabra and Time why not eliminate the third party market which buys liquidations? The Time treasury becomes the liquidator so Time benefits from each liquidation.
Technically not actually the same people that “own” both. Or at least the governance answers to their holders which aren’t all the same people. Wonderland doesn’t have any real power over Abracadabra. By doing this we would simple cut Abra out of the equation.
That being said, not sure it would “Eliminate liquidation cascade” like your title suggest.