The scary thing is that (note this CStreit) even though his novice permit wasn't signed off (for justifiable reasons), he may very well now turn up in one of the other sanctioning bodies. Anyhow, it's just another example of why novice racers need to read the whole rule book, not just the preparation specs (if they even get that far).
Admittedly the rules are somewhat ambigous in this case, but his misplaced grid placing is one of those things that you sort out after the race if someone protests you. Passing under a yellow is just something you never do.
The video was great and should be required viewing at Racing Schools world wide.