I think the coin lock-out is supposed to prevent people from putting in more coins while a game is in progress, as it would restart the game. I've played a couple EMs where attempting to add a second player eats the existing game. That's an educated guess, someone else should chime in.
Edit- looks like I'm wrong, some better information here:
http://forums.arcade-museum.com/archive/index.php/t-239136.html