Because there's nothing there
The whole planet is a barren wasteland, where only heavy industry thrives. Because of the frequent high energy EM bombardment of the star, very few electronics survive, unless shielded heavily. This causes most of the surface life to consist of heavy manual labour. If they do want electronics, it is only in the dark mines and rock homes. The connection to other worlds is limited, so news outside the planet is scarce.
Thick blankets of clouds that are near persistent, shrouding everything in darkness. The air contains trace amounts of toxicity that lead to many small discomforts, even with the medical staff removing the damages once in a while. Thanks to the clouds it is also very cold on the planet, making it hard to do any work there.
Thanks to geothermal heating their homes are warm and there is enough electricity for the few electronics they do have. Yet to get light they need to use special alternatives like bio-luminescent lamps that give off little light, or use things that are bad for the air like torches.
Food cannot be grown there, so they are completely dependent on what the federation sends them. Which is generally crap. You stuff your food supply ships for such a big colony with high energy food that can be densely packed. The hydroponics setup deep underground is still highly expensive for the colony and not producing enough by a long shot. No pleasure foods and the like. That means even narcotics like alcohol are very rare on the planet, giving little distraction from the bleak hard life on planet.
You have great freedom, but nothing to enjoy it. You'll not get punished for most violations condemned on normal worlds, but if you don't work, you'll die as they give you no food or medical aid. If you interfere with production or the like, you'll also die. Depending on the violation it's starvation or simply thrown into a pit or the like. This means that on planet it is highly unfriendly, with people trying to get as much enjoyment and material stuff to make their lives just a tiny bit better. This is mostly at cost of others.
The people who get paid are the only exception. The industry world always needs more people, as the people who are exiled aren't enough to keep everything running. That is why going there for some time pays very well. They are more protected from the general lawlessness, but they still live on the same bad planet with the same bad living.