Regarding the video which started this whole mess, I think that they didn't realize the Chinamaniac $215 situation would create such a stink, since it happened years ago and was very little-discussed on the forums until now.

When they made the video, they probably thought this was going to be the big reveal that Lannister was a real person (and the one behind a popular/similar video about Micon in the past), and that the China situation would either be ignored or just mentioned in passing. Or perhaps they were so excited about this "reveal" that they completely forgot about the China rolling for the moment.

It's hard to give either of them much credit for anything else. Remember, jsearles was dumb enough to post the video from the same YouTube account where he had videos of his kids, so obviously these aren't the sharpest minds who consider all consequences before doing things.