In my opinion..I think they should compensate him.They said he violated their terms...Their terms on the whitehat page is not even localised for other Languages. Too Bad.
In his first message, he demonstrates that his bug exists by showing that he exploited somebody elses account. This is obviously, never the way to make a bug report. Heck, it's probably even illegal. You shouldn't need to read a sites terms and conditions to know that doing this will be breaking them. It's an expensive lesson. Hopefully it will lead to him being more sensible in future. I have no sympathy.
It's not "bullshit Terms of Service" - Facebook clearly lays out the terms of the Whitehat program.
There was no bait and switch - it's very explicitly stated that he should not be exploiting the vulnerability, and that it needs to be clearly explained.
I respect that he found a vulnerability, but he still needs to adhere to a website's terms and conditions. If the security team he reports a bug to doesn't "get it" the first time he should try again, not publicize it on Hacker News and attract negative publicity by putting it on Mark Zuckerberg's wall.
While the instructions to report bugs on the whitehat page are not localized, the terms Facebook is referring to (https://www.facebook.com/legal/terms) are.