It's the editor's responsibility to set processes and standards to try to make sure this doesn't happen. If the rules exist but the reporter breaks them, then it's the reporter's fault and they get fired. As happened -- that's part of the process of maintaining standards. It's not the editor's fault. What exactly do you expect them to do? They can't fact-check and verify every single fact and quote in every article. They're not superhuman.
That's not how any management position works, which is what an editor is.
You're responsible for verifying that the output looks sane and that processes are good and appear to be followed.
You can't double-check every tiny detail. That's absurd. At some point, you simply have to rely on the word of your employees, and fire them and do damage control if it turns out they're not following procedures but claiming they are.
You seem to be asking for an impossible level of quality control, with the budgets available.
When more and more typos started to creep into news articles of our state-owned, national news feed and people started to notice, the explanation we got was basically that the frequency of news articles is so supposedly so high that it is supposedly impossible to catch them. If news orgs can't even do as much proof reading that they catch typos and grammatical errors, I highly doubt anyone is still doing editorial checking...
It's the editors responsibility to make sure fabricated quotes don't get published, but it's also the journalist's responsibility to not paste fabricated quotes from a chatbot into their articles. The responsibility of the former doesn't negate the responsibility of the latter.
I can't just submit shit work all day long then blame QA when some of it goes through. That's like a burglar saying it's the cops fault that people got burglared.