I tried to make this video as short as possible because the lag makes it hard to watch I'm sorry. Anyways, the spectators can place blocks. People also have gold blocks which (a) are impossible to get because there are no crafting tables. And (b) are unbreakable which makes the team who has them impossible to beat because they surround their bed with it. Here's the video:

 

I do believe that this lobby has since been disabled therefore this is no longer an Issue, thank you for your report.