The student still received a passing grade for the assignment despite some of the assignment being AI hallucinated text. From my experience, plagiarism is an automatic zero for the entire assignment or course, but there are tons of counterexamples when the teacher/professor doesn't want to deal with the academic integrity process.
That's a good point: in this particular case, the teacher of the course was subpoenaed to federal court and compelled to testify about their grading. Incredible burden, for someone else's problem.
The whole system is set up to disincentivize any effort to actually hold students accountable for cheating in a significant way (fail assignment, fail course, expulsion, etc.)
When we read about cases of students being held accountable it's generally the exception not the rule.