Correct. My take is that CCSTV simply [most probably] did not...

Correct. My take is that CCSTV simply [most probably] did not have the right to on-sell content. Regulations typically deal with market power, dealing with the number of "markets" (where free-to-air and OTT are two separate "markets") operators can deal in simultaneously. The regulations have not changed recently, thus would have been known to those doing the DD. Supply contracts typically have clauses prohibiting on-selling to preserve the rights of the copyright owners, and IMO it is these rights that were inadequately scrutinised.
To me, the implication of a statutory oversight is incompetence (given no recent material change in the regulatory regime), whereas the implication of a contractual error is more understandable given the complexities. That is why I call out the difference.
At the end of the day, however, the effect is the same.
As I have said previously, a more flexible (and most probably profitable) structure will result, which will be better for TV2 in the long run. Unfortunately that means a little more patience is required.
Scorp.