If the player just played by a faucet and won, I don't think it's a faucet abuse. The Paradice should really explain better what kind of abuse it was exactly.
I checked their Terms of Use and FAQ, there is no mention anywhere that faucet winnings cannot be withdrawn. Moreover, they have already stated that they allow smaller amounts won from the faucet to be withdrawn, so this is clearly a mistake on their part.

I can't help but wonder what would happen if someone deposited a small amount and got incredibly lucky to win such a substantial amount? Would they still deny the withdrawal? How would that be different from the current situation?

In our understanding, Faucet Abuse is defined by a systematic use of bonuses to get a large advantage over the gambling house. This person have admitted in previous posts in our main thread that he uses other website faucets, hes friends do too, and judging from the faucet and bet logs he had a system. He used the full amount of faucets, pumped the VIP rank by making tens of millions of low risk bets, tried to split hes withdrawal in several smaller withdrawals to bypass our abuse detection system.