I don't see what all the fuss is about. If the award has done so much damage to the HCAP surely they could just drop the H?
On a more serious note, it's a very desirable characteristic in a pilot to accept when you've made a mistake, learn from it, and correct it if you can.
Now that the HCAP know the truth behind her flights, perhaps they will take the opportunity to set an example and correct their mistake.