I don't know anyone involved in the judging or the winning team, but if what is alleged is true (that a team won that violated the terms of service) then my guess is that it was the team actively breaking the rules, and a judging panel selecting what they saw was the best product and being unaware of the violation. Honestly, judging hackathons is tough and screening each team ahead of time is close to impossible - it's not like you're going to code review everybody.

Cheaters always get caught.