There are many bitcoin services and exchanges that have a feature to cancel a withdraw. Usually most withdraws are sent to a queue and then they are batched with other withdraws to keep the transaction fee small. Some places batch by number and some batch by some timeframe like every 60 minutes or so. So that is not sketchy.

I think there was a similar situation with a gambler on Safedice. He basically kept gambling, tried a withdraw, it failed, and instead of stopping, he kept gambling more and more and I think made more money, however unlike this individual I don't think he lost his earnings. So there is proof that some "gamblers" might keep gambling even though they know deep inside that they won't be able to withdraw their winnings.