Yes, I think this post has established that whomever created the response to the original ToS violation (rather, just a plan to violate the ToS) wasn't being very thoughtful (assuming everything is being described correctly). I would assume that at this point, the discussion has been moved above the original employee who responded and is being dealt with at the dean level (with the goal to be avoiding UW appearing in a bad light in the press).
I've seen hundreds of "administration outrage" articles and I guess I've kind of learned that the backstory is usually more complicated, nuanced, and reasonable than the original poster implied. But the internet mobs proceed anyway.