Initially, this sounds really dangerous. I understand doing delayed cord cutting in a controlled environment, I looked into it myself, because it is good for the baby to get more blood from the placenta. But the cord runs blood both ways. If the placenta dropped below the baby, blood would flow from the baby into the placenta causing the baby to go into shock. That could easily be fatal. Also, I can only imagine the bacteria that would start to grow. Placenta encapsulation seems like a much safer alternative.
This is not true. During the process of birth, the baby's blood pressure drops which creates a pressure gradient from the placenta to the baby, meaning that blood is unlikely to flow back to the placenta. Over 40 years ago there was a paper suggesting that gravity could overcome the pressure gradient, but this could only happen during the first few minutes and is extremely unlikely to occur during normal handling of the baby (however, it was thought that lifting babies over caesarian screens could be a possible risk). The umbilical arteries (carrying blood from the baby to the placenta) close very quickly as the baby's oxygen sats increase. The umbilical vein (carrying blood from the placenta to the baby) stays open for longer, which is why delayed cord clamping is beneficial. Once the cord stops pulsating, no blood will be transferred either way. Therefore lotus birth is no different to delayed cord clamping in this respect.