The author's girlfriend had to re-follow the account, which implies the original followers were replaced with Danny's.
In the new Danny's screenshot, it shows that he's followed by three other "OG" account names: "blood", "murder", and "dead". Furthermore, the screenshot was taken from another account, otherwise it would have shown as "This account is private" (Try viewing your own Instagram profile while logged in and private). Whoever was viewing it was therefore friends with Danny, 'blood', 'dead', and 'murder'. In other words, someone interested in OG accounts, or one of new Danny's alternate accounts.
Finally, it would be truly bizarre if new Danny immediately implicated a friend at Facebook before anyone asked him how he got the account. If this was true, I would suspect new Danny would be going to great lengths to hide the fact, rather than trying to hand the excuse out before anyone even asks. This guy just stole someone's Instagram account. He's hardly a credible source.
I wouldn't rush to conclude that a Facebook employee did this. It sounds like the kind of excuse someone would give to pretend to be coming from a position of internal power rather than appearing to be the result of a hack.