I bought both of my houses with an "or assigns" clause in the offer. In both cases, I expected to (and did) move into the house as my personal residence, but if a seller balked at the "or assigns" bit, I would have walked on the first house and not sure on the second house. Why? Because I may want to assign the contract to a trust, partnership or LLC, in addition to the freedom it gives me to assign to another buyer.
The couple in the article were OK with selling their house for it to razed and a new structure built, but weren't OK with the new buyer selling the house to someone else?! That makes no sense to me...
As a seller, you agreed to price X. As a buyer, I contracted with you (the hypothetical you) to ensure you are paid X. I then do some legwork and find another buyer for X+P, and assign the contract to them. At closing, you get ~X; I get ~P; new buyer gets the property, and a bunch of do-littles in the process take a bunch of fees, expenses, taxes, and commissions off the table. I don't see the problem for you or I. You do and I acknowledge that.
You can feel free to insist (in the contract) that, under those circumstances, you are due X+P, and what you'll find is that the subset of the buyers who wish to assign the contract won't deal with you (you've taken their economic value add away), but you'll eventually sell the house. It might be for X - L, where L is the loss you take by excluding that subset of buyers, as remember that X was the highest offer you were able to find otherwise and that was from a buyer that you've now excluded. But at least you can feel good that you got the "full value" of the transaction.
The only reason this is possible is because the market is inefficient and I'd like to see more efficiency introduced into the market, whether that comes through legislation or via technical means, so that people aren't leaving $1M on the table to be scooped up by others. In reality that $5.2M property which ultimately closed at $6.2M might have sold for $5.7M, earning the family another $500K and saving the real buyer $500K.
If the buyer's agent is acting on behalf of the buyer, they were under no obligation (legal certainly, nor ethical or moral, IMO) to bring that higher offer to the seller. (Real estate law and practices are hyper local; around here [MA, USA], a "buyer's agent" owes a fiduciary obligation only to the buyer and is allowed (and in fact would be required) to not disclose the presence of this other potential offer as by the "undivided loyalty" clause, they are "prohibited from advancing any interests adverse to the principal's [read: buyer's] interest or conducting the principal's business in such a way as to benefit a customer, a subagent, the agent or any other party to the detriment of the principal's interest." In other areas, that might not be the case.)
In that case, it is the listing/selling agent's responsibility to advise their client (the seller) that the offer is too low and they should wait longer.