Yes, it is a big shame it's come to this.
On the face of it I'd have to say it's a Part 115 operation certainly not a Part 141 operation. How many "Students' actually end up with an aerobatic rating. It would seem most "paying customers" only ever went for one flight, so really is a glorified joy ride. They should have had Part 115 certification.
For our Aussie brethren, Part 115 is for Adventure Aviation and covers Commercial Ops that don't fall under Part 135.
Prior to the existence of Part 115 there wasn't a lot of scope for operations like this. The only real option was Part 135, which I know some operators used.
Perhaps you could say Part 141 was an attempt to comply by another means, I don't think it was an appropriate way either before of after Part 115 came along.
I don't figure why they didn't certify under Part 115, they could still have a Part 141 as well if they needed it.
Where the real shame lies is that fact CAA had been auditing them under Part 141 and it would appear there were no concerns raised. For 11 years CAA gave been auditing and allowing them to operate in this manner. Then they come along an abruptly close then up.
It would seem the Audit and Enforcement branches don't talk to each other.
A chat about the situation and finding a way forward would have been the better outcome for all. After all it would seem they ran a good operation. Perhaps there was stuff that preceded this that we're not aware of.
It certainly doesn't paint CAA in a good light.