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For some reason some embassies continue to request hotel and airline reservation documents as part of visa application package when issuing the visa is not guaranteed.

I routinely book tickets and then cancel them after printing the reservation to use for visa application. Usually this isn't the airline or hotel I'll be staying in but rather one that has a liberal cancellation policy. I'm not going to risk booking nonrefundable tickets weeks or months ahead of time when I don't know I'll be issues a visa.

Is there a problem with this? Basically will there be any problem if the consular officer finds out? We can limit answers to European Union and Five Eyes countries.

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    If a consular officer finds out you lied about having confirmed bookings and it is part of the requirements for a visa, then yes they might penalize you by refusing your visa. – user13044 Aug 5 '17 at 19:07
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The officer can easily see whether your ticket is purchased or just reserved. Some embassies require that you should pay for hotel or ticket in advance (you should show the receipt). However, they will always tell it on their site.

If they just require reservation and tickets your way should not lead to any issues.

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