Does that mean that any contracted work is indentured servitude? That sounds really broad. If I hire you to build a website, and you bail out halfway through and the liquidated damage clause kicks in, I don't think that makes you my indentured servant.
I was most likely confusing with "financial penalties", mostly it means not paying you after you stop working, and in some specific circumstances you can sue for damages. They can't fine you.
There generally aren’t financial penalties of any sort in those cases, except that you just don’t get paid the full potential value of the contract. You are generally paid hourly for the work that you do in a freelance gig (if it is an hourly contract) and paid a bonus on completion. If you fail to complete there is no bonus. Or in the case of a fixed price contract you are given a small amount upfront, and the full payment upon completion. You are never penalized for breaking contract—-you just don’t get paid the final amount.
I was most likely confusing with "financial penalties", mostly it means not paying you after you stop working, and in some specific circumstances you can sue for damages. They can't fine you.