To me, risking up to almost 100% of the bankroll is ludicrous. Regardless of the CHANCE of that happening, it's essentially taking the risk that at some point (which, statistically speaking, would happen given enough time) someone completely wipes it.
Regardless of if this bet was kelly compliant, regardless of the question of if it was appropriate to allow this bet, and regardless of what the setters of MoneyPot were under RHaver, if it is your opinion that this bet would allow excessive risks, then it is your responsibility as the owner/operator of MoneyPot to disallow such bets from being placed. As the owner/operator of MoneyPot, it is your responsibility to ensure that your bankroll investors are not exposed to excessive risk.
I would tend to agree that allowing this much of the bankroll to be potentially lost in a single bet is probably not a good idea. According to dicesites.com, many of the top gambling sites have more then ~32k bets placed every day, which puts an excessive risk on the bankroll, as if bets are large enough, then the bankroll could potentially be wiped out multiple times per day. I am not exactly sure why the kelly suggests that this would be an appropriate risk, however this would probably be an example when what the kelly say should be 'overridden' and to allow less of a risk.