Because submission of the PIN is suppressed, this is the exact equivalent of a merchant performing a PIN bypass transaction. Such transactions can't succeed offline, as a card never generates an offline authorisation without a successful PIN entry. As a result of this, the transaction ARQC must be submitted online to the issuer, who knows that the ARQC was generated without a successful PIN submission (since this information is included in the encrypted ARQC) and hence would be likely to decline the transaction if it were for a high value, out of character, or otherwise outside of the typical risk management parameters set by the issuer.