It doesn't help that the CEO admitted to editing Trump supporter comments. I mean I couldn't care less about those people, but that is censorship and suppression and I can't blame people for viewing anything reddit does from now on with a bit of skepticism. But obviously it's not that bad because they've still chosen to make reddit their home.
He played a bad joke by swapping out his name for mods. Pretty tame stuff really. A stupid little regexp substituion prank of the kind programmers play all the time.
But yes, he did violate a trust. A sysadmin has a sacred duty and he violated it, but in a very mild way that is understandable and not a cause for future concern since he clearly realizes he made a big mistake.