Yes, Rule 1-2 should be invoked, as former USGA president David Fay urged on Fox’s telecast.
Exceptions 1. An action expressly permitted or expressly prohibited by another Rule is subject to that other Rule, not Rule 1-2;
They had the right to DQ him under 33-7, but not 1-2.
33-7. Disqualification Penalty; Committee Discretion A penalty of disqualification may in exceptional individual cases be waived, modified or imposed if the Committee considers such action warranted. Any penalty less than disqualification must not be waived or modified. If a Committee considers that a player is guilty of a serious breach of etiquette, it may impose a penalty of disqualification under this Rule.