The second kind of line issue is from being “asleep at the wheel”. For example, the opening spread on an NFL game is +4.5. News comes out that half of the team has the flu, and many players are downgraded to questionable or out. The line moves from +4.5 to -4.5 (the healthy team, which was an underdog is now favored). If a book did not move the line as the market shifted, that is not truly a bad line. That is actually a “stale line”.
Generally, bad lines are voidable, and stale lines should be honored. If a book could void any bet on a stale line, all steam-bets could be voided.
It appears that in this case, the player bet into a stale line. The line was good when it came out, but the linesman was not paying attention to the market. If this is just a stale line case, I would normally recommend that the bet be honored (and close the account afterward, if you do not want this player).
There is another issue that makes SIA’s position more precarious. SIA waited until after the event was completed to void the wager. While this is not practical all the time, a book is given a much wider latitude in voiding if it does it before the event starts. In this case, I still don’t think it was a bad line — clearly a stale one, according to your history.
My recommendation would be to pay the player, and close the account. Did the player know it was a stale line? Clearly yes. But players betting into steam or stale lines generally keep their wager (and frequently have their accounts closed)