JAMS isn't a court system. It is a private arbitration service, often staffed by former judges.
It's a lucrative moonlighting or retirement gig, so the courts often imbue it with semi-judicial power and have a heavy bias to enforcing its rulings. Yet it doesn't even have the ethics rules of regular lawyers. ("Is it specially illegal? No? Then it's OK to do.")
In this case even a layman can understand how it's a conflict of interest, and how you might not get an impartial hearing if you refuse the waiver.
