@Robin4
You are right, I don't agree, well, not 100% anyway.
The thing is, I host in my own home and I want it to be beautiful and full of lovely and interesting things. If I had to pare it all back to a soulless, simply functional space, then I wouldn't want to host here at all.
Now of course I could keep the guest rooms cheap and cheerful, but then this might look glaringly obvious compared to the rest of the house and there would still be plenty of things guests could damage in communal areas. And the fact is that most of my guests book precisely because of the way the house is decorated and furnished. With so much competition in London, one needs to have something to stand out from the crowd and the décor is what stands out here.
However, I do agree with you that one should be cautious about filling a guest space with very expensive things. I would certainly not put a rug of such high value in a guest room, but if I did inherit it, I would not want to hide it away either so it would probably end up in the living room. At least there I could keep an eye on it and deal with spills asap.
It's also a myth that you have to spend a fortune to have beautiful, high quality furnishings. If I had spent what people assume I have spent on this house, I would have been bankrupt years ago. I very, very rarely (read never) pay full price for anything. Ebay was my best friend when furnishing this house and now I am a regular at Homesense/TK Maxx. Much of my furniture is vintage and bought for a song or even acquired for free, not priceless antiques (most guests don't know the difference TBH).
It can still upsetting though when a guest damages this kind of stuff as often they are not things that can be purchased again. I do find that most damages relate to stuff like door handles and light pulls rather than furnishings though. That's annoying, but not something to get upset about.
One does still have to think about practicality. Style should not come at the price of substance and a space needs to function properly, e.g. have sufficient storage, be comfortable etc. My kitchen is in a traditional, country style with hand painted cabinets (again, not as expensive as one might think) but it has all mod cons and after 11 years still looks almost new. The fancy crockery and cutlery are stored in dressers in the dining area and it is very rare for a guest to take any of it out. They use the day to day stuff in the kitchen cupboards and I wouldn't bat an eyelid if they broke an item from there.
If I was renting out a separate space where I was not living, it would certainly be very different from my home and have far, far less breakable and 'fancy' stuff, but I would still furnish it with character and care and have interesting details. This can still be done on the tightest of budgets. Even IKEA has some cute stuff!