The annoying thing is that the issuer started the problem in the first place.

Someone enters a credit card and a bad CVV, Stripe sends it to the bank for validation, it fails, but the bank approves the charge anyway. Now you have an approved charge with a bad CVV. The bank punted the problem back down to Stripe, and Stripe punts it to you to figure out.

If the bank approves the charge how did this end up being the retailers problem? The bank said they would pay it despite the details not being valid, they surely take on the risk in law ... how else would it work and remain logical?

You’d think so, but if the charge does end up being fraudulent, and customer charges back, not only are you on the hook for the full charge, plus processing fees, plus a $15 dispute fee/penalty.

It is why I also cringe when people chargeback before they ask for refunds. The system is stacked against the retailer.

That assumes it's a zero-cost decision. It's extra friction in the payment process (the CVC must be entered and must be entered correctly) which has a non-zero impact on genuine transactions. They "should" only force it if its benefits exceed its costs. According to a sibling comment from someone at Stripe, they reduce genuine revenue by more than they reduce fraud costs.