[JohnBooty]

I wholeheartedly agree that "don't trust XYZ, they'll probably lie, but I can't tell you any more about it" is... very non-ideal.

There are some situations in life where there just aren't any good choices. It's possible that this may have been one of them.

What would you do if you felt that you had to walk away from a bad situation on a public project, and had strong reason to believe that the other party would attempt to publicly misrepresent the situation?

You could remain silent, but we're talking about the court of public opinion here and we know silence is often interpreted as guilt, or at least irresponsibility. It would also allow the other party to continue creating this "bad situation" without, at the least, giving future moderators some warning. Likely, the mod team would have faced similar criticism had they simply walked away silently.

Presumably, the members of the mod team are interested in maintaining their own reputations and would like to continue working in this field.