> Similar story for lower levels of confidence

therefore, the polymarket betting odds will reflect the truth - even if that info is a secret that nobody else but the insider knows. And if this is the case, then even an outsider could make use of the odds as a source of info which would ensure that market efficiency (which is about the flow of information) is high.

So what's wrong with insider trading again?

That someone with inside information will e.g. make 500% while those late to the party e.g. only get 10%? (of course your example is not very realistic to begin with)