I'm biased of course, but when I read "$X is backing $Y to do $Z", I read $Z as what $X is specifically and intentionally backing $Y to do. In this case, that's not accurate. YC would never specifically back a startup to "abuse factory workers"—that would be absurd. Nor is the phrase neutral; it's obviously accusatory.
HN titles aren't supposed to be used to build miniature prosecution cases. On some other sites, it's fine to use titles that way—it certainly maximizes attention, which is great for those sorts of forums, but on HN titles are supposed to use neutral, descriptive language—and then people can use the comments to express their interpretation and their views.
(Edit: Actually, even on HN it's sometimes informally fine to do that too—it is a grey area but sort of light grey, if you see what I mean. That is, sometimes a submission will use a baity title, this helps the story get attention and make the front page, and then moderators will 'sand' the title back down to neutral language and the thread can stay on the front page. We do that when it's a good story for HN—if it's not, we'd be more likely to downweight the article off the front page. The trouble in the present case is that neither of those options are available to us when the story is about YC and/or a YC startup.)
I haven't studied the details so I don't know what a neutral phrase would have been in this case. Some commenters have suggested things like "production line monitoring". I'm sure it's true that technology like this can turn into a Taylorist nightmare, but there surely are also ways to use it humanely, so in this case the real story seems to be that the founders published a video that backfired badly on the internet. Hopefully they will learn from this and not only alter their marketing, but maybe even change the product to be less likely to be abused.
But that's just my superficial take and like I said, I'm biased. More importantly, I appreciate that your intentions were better than I assumed they were and am grateful that you clarified that. Even after years of doing this job, I'm constantly still learning to make fewer assumptions. It's crazy how hard that is!