well of course it's a stupid brainwallet. it's the empty string!
I mean it may well have been generated by someone deliberately hashing an empty string, just as all brainwallets are created by the user deliberately choosing a particular string to hash, as opposed to some flawed software hashing an empty string while the user believed it was doing much more than that.
bitaddress doesn't seem to allow a user to create a brainwallet using too short passphrases of which the empty string certainly meets that criterion but maybe some other software doesn't have that check. and the person thought they were generating a secure bitcoin address and not a brainwallet. it could happen. clearly they learned their lesson though as no new 0.9 btc deposits have been made since then.

It doesn't eliminate any bias at all. It simply mixes the bias of each individual die among the bias of all the dice, and you hope that doing so is enough to maintain the security of your resulting entropy.
but no dice are being rolled. they're just sitting in a big bag and you jumble them around, reach in and grab one on whatever side you happen to. i dont think the bias of a particular die has any role in that procedure since die will not be able to necessarily achieve a particular position they might achieve if they were not in contact with other die.
And if you go out and buy a set of 100 dice to do this with, how do you know that every single dice in that set hasn't been subjected to the exact same manufacturing defect and therefore has the exact same bias as every other dice?
well they likely will all have the same bias in that case but i dont think that is going to be a problem with the particular procedure we're talking about here. just my opinion.
In addition to BlackHatCoiner's response, it is often impossible to pinpoint exactly how a seed phrase or private key was compromised, so asking for such an example is meaningless.
well in the cakewallet situation they know exactly how it happened. it was generating insecure seeds. so yes it is possible sometimes to know how or why something happened.
but i have yet to hear of anyone ever saying they are skeptical of dice because they once created a bitcoin private key by rolling dice and then someone stoled their funds from that address and they strongly suspected (even if they couldn't prove, of course they can't prove it) that it was because the dice rolled an insecure private key.