I am not supporting the theft, but it will make better sense when you realize that copyright holds little value in the real world outside of the court system. Next time, keep your repo private until you're ready to release everything together.
You have no idea how many emails were exchanged, attempts at explaining them what a commit log is, what verified commits are...to just refuse to do anything until Stanford weighed in.
It is incredibly condescending to say "arXiv is not a place for a copyright strike". as if I decided to start one.
If somebody gets robbed in front of a place of worship/whatever, would you scold the victim by saying that's not the place to get robbed?
Incredible.
But plagiarism is a serious academic misconduct, that gets papers retracted, people fired from academic positions, PhDs rescinded, etc. It's not at all a copyright issue and would remain a gross misconduct even if copyright were abolished today