Yeah, that's another option if we went with the withdrawal approach. One other feature consideration that plays in here is whether you'd need to pay to suggest a niche, which is being discussed here.
One advantage of encouraging users to be more diligent about niches they suggest up front is that niche suggesters could potentially pass the responsibility to the community. If I know the community will do the research or have the information about whether this is a valid niche or not, I may be willing to suggest new niches without doing any research. As long as I have the ability to withdraw a niche suggestion if it's not valid in my hip pocket, there's less incentive for me to "get it right" the first time. Because of that, if Narrative was to support suggestion withdrawals, there may still need to be a reputation hit to the suggester. Regardless of whether it's voted down by the community, voted down by the tribunal, or withdrawn by the suggester, it's a niche that shouldn't ultimately have been suggested.