Yes, but how is being trustworthy and competent not a criteria when selecting for those who have good judgement?
I won't trust you with my money, but I will trust your judgement about who to trust and not to trust with my money, and you can give the same authority to a number of people who can also pass judgements about who to trust and not to trust? Who does that?
Am I the only person who find this fundamentally flawed?
I think you're mixing things up.
If I negotiate with user XPTO and get scammed, logically I will give negative feedback (which is easily seen by all users) and I will negatively affect their trust list. If I only put negative feedback on my trust list, most other users probably wouldn't notice. That's why I'm leaving negative feedback.
On the other hand, I may never have traded with user ABCD, but based on his behavior I trust his judgment on the forum. So, I'm adding them to my list of trusted users without needing to write feedback.
Can you understand the purpose of both tools?
One is for you to leave information publicly available, with details about a specific user. This can be something positive, informative, or negative.
Another option is for you to personally value or disregard a user's opinion about something on the forum.
One is public, the other, while not entirely private, is more difficult for other users to see.
Can it be manipulated? Yes, but that would require dozens of users to trust each other, in collusion, with only a few other users outside the group distrusting them.
Does this conspiracy group exist? If it does, I've never been invited, which makes me feel excluded and undervalued.

To be clear, I don't have a problem with the trust rating itself. I'm pointing to it as evidence of a bigger issue.
The problem is that same DT members have already ruled out the remedies you listed:
- Complain to the person who made the rating → An "unsolicited" PM to a DT1 member gets called harassment
- Complain to the people who trust them → This gets called blackmail
- Convince people to distrust them → Also called blackmail
I never considered any private message I received to be harassment. I agree with some and disagree with others. Logically, if someone abuses this, it can be unpleasant. But harassment? No! Fortunately, I think for myself and have my own opinions. I may be wrong, and if someone gives me logical advice, I know how to admit it and adjust. Otherwise, my list is based on my opinion. I don't know, nor do I want to know, what others have on their list.
Complain to the people who trust them/
Convince people to distrust them - I don't understand how this can be blackmail. What kind of blackmail is this person going to use against me? Are they going to write nasty things about me here on the forum? Are they going to put me on their list of people you don't want to see? Let him do it. My actions are proof of who I am, not what others say. There's a lot that others can say about me that I may not even have realized. I don't know if they're saying good things or bad things.
This is an internet forum, things shouldn't be taken too seriously. I'll probably never meet 99% of the people I talk to here in person. Therefore, they can only bother me to the extent that I allow them to.