I'll address this from an international point of view considering that local competition athletes are seeking to develop international level skills (improved) as a goal.
This is the main thing: "1. he/she has confidence in his/her reaction time and speed to avoid an attack;"
Elite Taekwondo athletes have body and head movements skills comparable to the best boxers. Very different set of skills, developed in a very different way from point fighting, MMA, and just about every other martial art.
Most people would think if you fight in a boxing ring, you should keep your hands up, but that is not always the case either. Even when you look at the most elite boxers, many times they will fight with that hands way down. When they feel they have superior movement to their opponent, some will even dangle their arms to side, and taunt their opponent. Some of these taunted opponents are no joke either.
A few years ago I was visiting friends in Bensonhurst, Brooklyn NY. They took us over to Gleason's boxing gym where we met Pauli Malignaggi. At that time, Pauli was doing really well. We hung around the gym met a lot of people and watched part of Paulie's workout. Afterward we were all talking, one question I asked Pauli was about his tendency to fight with his hands down he said he was "faster/quicker than they are" and added that even if they do catch him, he is already moving (with the punch) and it's not going to do anything.
He also commented that when a guy realizes he can't hit you and you are tagging him at will, his confidence is destroyed and now you can go in for the kill. It's also a part of psychological warfare.
My personal experience is, martial artist who are critical of an elite Taekwondo fighters tendency to have their hands down are looking at the match from the outside or from their own skill set, as sort of an armchair quarterback and most have never had the chance to fight an elite Taekwondo fighter (or an elite boxer), and in my experience if they do get that chance, they come away saying "wow, I could not even touch that guy, with my hands or my feet."
Now I do see MMA guys fight with their hand down at time, but that is just a huge mistake because the one's I have seen have ZERO body or head movement skills, so as a last line of defense, they should keep their hands up.