Hmmm. Made up prices in this example but presuming it's the same as ex EU on BA.
If I fly from FRA I pay £2k rtn on LH.
If I fly from AMS I pay £1.2k rtn on LH.
By not taking the last sector, LH could have the right to charge me the difference. It's not beyond the realms of possibility that this could be classed as discriminatory pricing.
Just because LH have T&C doesn't make it enforceable by law.
I cant see what LH are losing here since they dont refund for a sector that is unused, and were willing to provide a seat to the pax for the last segment. By not flying the last segment the pax has freed up a seat. Yes LH would have earned more on a straight ex FRA fare but probably lost a passenger. I think they are on very thin ice here.