What happens when a worker can't complete a job?

[#1]

Let's say a worker bids on a job, wins but can't complete it (like a programming job). Can he/she break it off (with no money transferred) without any repuccussions or can the client leave 1star/negative reviews?

[#2]

For either hourly or fixed price jobs, if there's no payment made because either no hours were logged or a full refund was given by the freelancer, there's no public star review, but there will still be private feedback, which affects the freelancer's Job Success Score.

[#3]

First of all a freelancer should never apply to a job when they don't have the skills necessary to complete the job. 

Having said that, a freelancer can close the contract and issue a refund of all the funds in escrow. You will have reprucussions. A job closed without payment will affect your JSS AND a client can still leave feedback