Let's put this in context.
An additional service a Controller is expected to provide Aircraft he has in Radar Contact is Altitude Alerts.
The Aircraft was not on an IFR Route, it was not conducting an Instrument Approach, and was not being vectored....even while it was being handled by Controller 1 at SCT.
Compound that with the Aircraft was flying VMC at approximately 400-600 feet following highways on the ground....all the time well below the Minimum Safe Altitude (MSA) for the whole flight until perhaps at the max altitude it reached before beginning its uncontrolled descent leading to the impact with terrain.
Controller 1 knew he would lose both radar and comms with the aircraft and that is why he terminated his services to the aircraft.
He did not use the required wording....."Radar Service Terminated"...but the language used and instruction to return the transponder to the standard VFR Code of 1200 speaks volumes to what was his intent.
In light of the low altitude and pending loss of comms....what service was the Controller expected to provide to the Aircraft?
Even Controller 2 assumed the aircraft was VMC and was climbing VMC (possibly through a hole he said to investigators) but was following the procedure to identify and locate an aircraft making contact with him.