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I didn't write the Casebook play, so it's not my interpretation.
There are a number of ways that the referee could override any unseemly advantage, such as the one you suggest. For example, if the referee feels that there is no possible way the team could line up legally and, as you suggest, the snapper and QB commit this clearly unfair act, he may invoke either 3-6-3 or 9-9-3 and run the clock to end the game.
But with three seconds left, one required for the set and one required for the snap and spike, it is feasible to accomplish the play legally. So enforcement of the ruling in 7.5.2 SITUATION E is legitimate, as judged by the referee.
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