My tenant covered majority of my mortgage, and if there was a deficiency I'd be able to cover the costs.

Also, and I am not sure if this inspection is like any other I had before (radon, roof, mold, etc) where inspector may say all is well or point out deficiencies and then in small print at the end of the report takes out any liabilities for him/herself in the event something was missed by him/her during the inspection.

What if it's an unknown deficiency of the house that causes his injury like roof collapsed? 

Unless the contract for deed states otherwise, the purchaser-in-default is subject to the same collection procedures specified in Sections 51.003–51.005 of the TPC for any deficiencies resulting from the sale.

There are reasons I would not look at this negatively but I might consider it a red flag if they do it to try to get you to overlook another deficiency. 

The a/c failed, and the inspector noted the deficiencies. 

Then I make sure I highlight any deficiencies in the property.

With this understanding, my inspection revealed several deficiencies including roof replacement.

Don may have the ability to with a full foreclosure also get a deficiency judgement if he thinks that is worth pursuing..

If the sale is terminated, then there is no equity and no deficiency.