These cheaper fares tend to be from airports where Cathay wants to increase their presence, or is losing business to other airlines. They aren't pricing errors, or at least most of them aren't.

With regards to what happens with dropping the last sector, well that's the question. If you've read the BA forum, you'll see that the airline has been threatening (and I believe in some cases issuing) a re-priced ticket for the sectors that people have flown. They could also choose to do nothing, and they also have the option of refusing to issue a ticket to someone who continually drops the last sector.