That is one rule that the FEI is adamant on. The horse bit his tongue, the judge noticed it at the halt rein back and she was excused. Because she did not receive a score in the Grand Prix, she did not qualify for the Special. Had it been a show where qualification for the Special was not required, she would have been allowed to continue competing.
In any show you or I were riding in, even at the lowest levels, if there is a speck of blood on the horse they are excused. My friend's young horse lost a tooth once right before a test and she was worried about being eliminated because of the blood. Luckily it stopped bleeding before the test, but even though it was a "natural" source of blood and not from abuse, she would have been eliminated.
It is a very black and white rule though, and therefore easy to enforce. Unlike the Rolkur rule which can very easily be challenged.
Anyways, afterwards there was a press conference and the team veterinarian was pushing asking that the FEI change the rule so that if the horse stopped bleeding soon after it started for a minor wound like a nipped tongue, they would be allowed to redo the test at a later point.
The other thing that you have to realize is the stress that these horses are under in such an environment like that. I don't know how many of you watched or were at the WEG when this happened, but it is a very electric atmosphere and I know my horse would not be himself either. Despite the Rolkur, the horse was probably quite stressed purely from the atmosphere.