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I'm sure they knew, kept the problem around so that whenever they inevitably got caught they could point to the software glitch.

Deutsche Bank has been revealed to be systematically laundering Russian cash for years, to the point where you see a headline about "bank gets caught laundering Russian money" its almost always DB.

It’s not a bug, it’s a feature

How can it possibly be both "basic functionality was not working" (high severity) and "no suspicious transactions had slipped through" (low severity)?

Pretty easy to understand if you swap what the software is detecting to "asteroids which are on impact course with earth". Basic functionality is to detect asteroids which are on a collision course with earth. The fact that no undetected asteroids struck earth doesn't mean the software worked or didn't work, nor does it mean that detecting asteroids which are on a collosion course with earth is not basic functionality.

Absence of evidence doesn't mean evidence of absence.