These are single case decissions - you can't make a rule otherwise you could make directly a programm-query and not allow this. This depends on the airline itself, geogrpahical data, network etc. An Airline based on a pacific ocean island paradise may use small aircraft because they can not fill larger aircraft by the given demand. But using a 19-seater aircraft between New York and Washington or Boston is clearly not necessary. A larger aircraft can be used here without any problem. And using 20% of the slots of an airport to operate to mainly larger airports is not a fair play too.
And the usage of slimline HD seats in business class is obviously not the way an airline can operate. That you may get bookings is another thing, but no one ever asked for this or gave a hint about this. And the player using this bug knew very well what they were doing especially if they are already known from other game world to use each possible loopholes, but also for the others. Or do you really want to tell me that you put the lousiest seats in Business and don't think that it might be wrong if there is a good booking on that. At least one could have asked ... but no one did.
By "single case decisions", you are still saying that you would make judgement with your own standards, or with the standards of only a few people, whom we - ordinary players - can only pray to be sensible, prudent, and fair.
Anyway, I don't think we are talking about the same thing.
I agree with your idea that most people would have a sensible idea and criterion of what is "realistic" or "fair", and yes, no one in real business would put lousy economy seats to business class and charge a lot of money.
But, those "unrealistic" practices are practically possible in the game, if the player really intends to do so. You may call that "making use of loopholes" or "unfair play", but hey, they did not create those loopholes, nor did they hack into the server to change data or stuff. They can do that simply because first, it is technically allowed, and second, there is no clear rules to regulate them.
So, if you would like to put an end to it, either mend the loopholes, or formulate clear rules, stating we consider what and what to be unfair practices or cheating and should be forbidden, or the airline may be deleted or reset.
Otherwise, you can only resort to moral attitude, which is what is being done right now, that we call for fair play. But what I find unreasonable is, AS's expression implies that they would take legal measures on moral stuff, i.e. delete or reset the airlines that are not playing fair. It is essentially the same with fining someone or putting someone into prison because he is mean to others. Do you find it acceptable? Maybe you do, but I don't.