It's just legal here
What the controller did was completely legal here in the US in Class E airspace. As long as you have green in between or if traffic appears to merge most likely you will use 500 feet separation ( or 1000 if heavy is above). On the other hand you might be lucky that the King air was receiving services form the ATCer....cuz the king air could be out there talking to no one!!!!
Granted the traffic call was not in the appropriate form that i have to admit and it could and did leave a certain confusion.
But on separation legalities the controller is clear. Even if i think a climbing jet towards another aircraft separated by when level of 500 feet at high speed will in a large number of times call for a RA.
Don't blame the controller but bring it up to the ones that submit the rules that we follow. That is why they get paid the big decision bucks.......with no idea of how the system works!!!