I wonder if the initial decision was made by Chinese Executives and Event staff without consulting corporate HQ, then corporate backed them since they have no obvious strategy for backpedaling.
But you just described the obvious strategy: say that corp should be involved in punishments that transcend a particular event (I'm sure they were already) and that corp has decided on punishment X instead.
Extremely unlikely, especially given the response afterwards. Blizzard runs things, despite the corporate setup as it is force to be in China.