I read that letter. I also read the entry rules for the GH which state clearly both the required format and that improperly formatted entries lose their fee.

Don't have a lot of sympathy for the girl. How long was her synopsis, that she needed to single-space it? Was she trying to sneak in a too-long synopsis, single-spaced, in order to get more pages entered?

If they let her slide, what happens when someone finds out, and they were disqualified for another "minor" submission error? And they start writing angry letters?

The rules are clear. If you don't follow them, that's the risk you're taking, and not someone else's problem.