It is highly likely this was a passenger transport, paid charter, flight (given that the pilot was involved with a scenic flight rotary wing operation, it is reasonable to assume that the relevant regs should not come as a complete surprise) Charter operators must replace engine every 2000 hours / 12 years to carry fare paying pax.
If that were to be true then I am even more astounded. I was of the assumption it was a private type operation flown by a friend. If it was a charter why wasn't it in a ME IFR aircraft?
I have to say - getting a bit sick of the "clapped out engine / steam gauges are unsafe" argument, which is revived here.
It's not about safe/unsafe it's about risk. As aircraft get more expensive you reduce risk right up to a airliner size aircraft where pretty much most of the risk is reduced by multi engine turbine, redundant systems and two pilots. People usually don't charter airliners because it cost to much.
Interestingly in Australia I have heard the argument from clients of "it's because we can" that they charter VFR SE aircraft. Yet when the same people charter aircraft in a foreign country it's a multi engine turbine. The reason it's that way is because in some countries a King Air or even a Lear Jet is the cheapest aircraft you can get.