Depends on journal. Predatory and low tier journals that's true for, but at higher tiers it is far less common. You still get the occasional lazy reviewer, but typically they wont be asked back if the editor isn't lazy as well. The system certainly has its flaws though.

Retractions do happen as well, especially if it's clearly proven malpractice. I've been behind 2 retractions so far, but it has never (in my experience) happened at the "contact corresponding author and seek clarification" stage of escalation. Typically it requires escalation to the journal itself.