Totally agree that the casino has almost no footing here. The fact that the cards were not shuffled isn't really a factor here. That is the casino's responsibility. It's also the casino's responsibility to monitor and shut down games that are out of control, and that doesn't seem to have happened here.

Casinos are allowed to break their own rules regarding betting limits. Unless the state/jurisdiction has a limit, it's up to the house to decide when/if a bet is over the max. If a large enough player shows up at a $5K table and wants to bet $10K, you can be sure that he'll be allowed to play.