Paul, the hypothetical example you give rarely, if ever, occurs. More often than not, it's a photographer taking advantage of a model in order to get images for little or no outlay for stock or other commercial use. This only serves to give TFP a bad reputation. I'm 100% in favour of TFP but not at the expense of giving a model a raw deal. I think if makeup and other services are required for a TFP shoot, then the costs of this ought to be shared between the two parties, but again I think this is a rare occurence and such costs don't normally arise.
If I want a model for a commercial shoot, I'll pay for one that fits in with the required look of the final image and that has the experience necessary to ensure that every minute of the shoot is productive.
At the end of the day, as you say, if a model isn't completely comfortable with the terms of a TFP shoot then she should just walk away from it.
- Thorsten.