Earlier quoted context omitted.
If I understand correctly, they were planning to remove the Power Peg code. Do you re-test the left-overs of your refactoring: the parts you delete? The real problem here is that they were using incremental deployment and did not have a good process for ensuring the same changes were successfully made to all server.
The parts you delete aren't left over. They've been deleted. Do you test the parts of your code left behind after refactoring? Yes, absolutely . Code is either working correctly, and verified to be such by automatic testing, or it's not there. You don't leave unused code lying around to be removed later!
This is the biggest argument in my opinion against incremental deployment: it is hard to know exactly what is on any given box. Each time you push an incremental piece to a server you have effectively created a completely unique and custom version of the software on that server. Much better to package the entire solution and be able to say with certainty, "Server A has build number 123."