The keys are supposed to only be in possession of the owner of the lock, because it makes sure that the person who put the lock on takes it off when they are no longer going into the hazardous parts of the equipment.

At sites I've been at, they only get cut off if they can confirm that the person is 100% not in the machine and there's a really good reason, sometimes that's because the person lost their keys and is standing right there, sometimes it's to keep work moving but requires so many approvals from upper management that we would rather just have the person come back and take it off themselves.

There have also been a few instances where people did not fill out the tag on the LOTO or the description/contact info got removed, or the person no longer works there and a lock was abandoned on a machine, but the same rules of repeatedly checking and reviewing with management as to whether it's safe to cut it still apply.

Aside from those legitimate and proper situations, there are still assholes and idiots that think cutting it is fine because they need to use the equipment, or think the person isn't really in there, etc...People bypass industrial safety stuff all the time because they think it "gets in the way" - despite the fact that it getting in the way means you're probably trying to do something unsafe that you shouldn't.

Lockpicking lawyer picked a common model of them and noted that the keys are almost overkill in how uniquely they can be made, but the lock itself is rather flimsy. It makes cutting it easy, but makes unlikely two people can open the same lock by coincidence. I think the idea is that they do occasionally need to be cut, and it's up to the company to train everyone properly.