Full ratchet clause

This full ratchet clause when applied in vc contracts will dilute the entrepreneur to a level which makes him simply leave the company.
How does it work ?
Valuation Round A is 4 Million post money (pre-money valuation is 3 M)
Investor A has invested 1 M for 25%
If in Round B (which is a downround) valuation valuation drops to - lets say - 2 M pre-money, and another Investor B invests 0.5M the captable will look as follows

Round A
Investor A  25%
Founder  75%

Round B
Investor A 40%
Investor B 20%
Founder 40%

So A has gained 15% doing nothing and Founder has lost 35%.

How can this happen?
The money that was invested by investor A is valued at 100% at the valution of the downround B.
So 1M/ 2.5M = 40%
Investor B just invests 0.5M at 2.5 M post money valuation.