Again, this clause is meant to provide FI with a reasonable way to recoup damages if a Founder blatantly disregards their obligations of this agreement. This clause (3.D) is only relevant if a Founder does not abide by the terms of the agreement. If a Warrant is validly issued the Collateral Security is cancelled.
However, please note that as of EOY 2021, in the history of FI (since 2009) and working with tens of thousands of Founders, we have never exercised this clause (and hope we never have to!).