on a large scale doesn't this mostly protect people from dangerous debts?

Not really. It just ends up with lenders offering far more predatory interest rates, which worsens the situation for the debtor. The system is set up in such a way that you can spiral pretty hard with a single misstep.

I’m honestly unsure. What is the alternative?

Given that there are plenty of developed countries where credit scores don't exist (and plenty more where they do but only for businesses), I think alternatives are imaginable. I would know, I live in one such country.

If you want a mortgage here, the bank will:

• Ask you about your current loans and potential past defaults
• Ask you about your current and past income, marital status, employment status, etc.
• Use those variables to pretty straightforwardly determine your loan capacity
• I think do a background check in national databases for defaults/"bad payer" status
• Contractually obligate you to receive your salary on the same account from which they will automatically pull the mortgage. I don't think this helps reduce actual defaults much, but it probably greatly reduces the financial and administrative overhead of late/missed payments. Also this ties you into the creditor bank which is good for business, IDK how standard that practice is abroad.

The US consumer economy is very highly dependent on short-term/credit debt, and that is absolutely crazy to me. Some Americans say they "need" a credit card to defer payment on some purchases, and as someone raised in culture where debit is king this sounds absolutely insane. Y'all have been propagandized, here it is perfectly normal to not have a single credit line open before shopping for a mortgage and if anything your banker will commend you for it.

For the opponents, what is the proposed alternative?

I’d imagine this is the crux of the problem. Banks need some way to determine if someone will pay back their loans, and what better way than to tabulate their history of doing just that? Should banks be willing to take risks in a system with stuff like the 7 year rule?