This etymology starts from a verbal form, which actually is a derivative of δεσπότης and not its basis. As often in such cases, the word is derived, not from the present stem, but from an aspecto-temporal stem which matches most closely the form to be explained, in that case the passive perfect 3sg δεδέσποσται. This inflected form, with the 3sg middle ending -ται, provides another inflected form, the Nom.pl. *(δε)δεσποσταί, which happens to have an ending homophonous with that of the middle 3sg: the model (implicit) are usual pairs like πεποίηται / ποιηταί, δεδίκασται / δικασταί. From this form one obtains δεσπότης through a phonetic manipulation, the dropping of [s]. Agent nouns in -τής are regularly end-stressed, so that the seemingly abnormal non final stress of δεσπότης (in that etymology) had to be accounted for: it was linked with the dropping of [s]. The loss of reduplication implied by this etymology is not commented, because it was clear enough that reduplication was a verbal feature and not a nominal one (see the pairs πεποίηται / ποιητής, δεδίκασται / δικαστής)