West Coast & Airbubba,
It seems to me you are deeply down into the weeds trying to justify what has happened in this incident as being OK from the cockpit viewpoint. I think you both need to take a look at it from a much higher level.
There is a rule of business that applies and it is blind to whatever business you are in, the airline business isn't exempt. Simply stated, "A company's reputation in the eye's of its customers is built over years and years of demonstrated customer satisfaction. But, reputation that developed and was built over those years can be lost in a blink of an eye when customer satisfaction, either perceived or real is lost."
While you are defending an event based on complex rules or regulations, some of which are open for interpretation, customers who know little or nothing about the rules you are using to justify your positions, look at visual information (270 million views so far) as to what took place and conclude that it didn't need to happen.
The customers are smart enough to recognize there were better ways to handle this situation by the airline and that even the way it was handled, created the entire situation. Turning the episode over to the authorities to solve was a huge mistake.
This morning, at the opening bell the airline lost $1B in valuation, at closing it recovered to losing only $250M. If you are a CEO of a company that deals with individual customers, thousands of them every day, you expect to have employees that are customer oriented at the lowest level. If you are not customer oriented on the frontline, don't expect to be ever among the best providers having the best businesses.