Interesting, if that is in fact related to this incident it suggests that they got a copy of the Game Master(GM) private key, they are activating GM only 'features' of the game. In this case the 'kill all' aura, another feature is to imbue your weapons/armor with arbitrary stats. Saw a character doing that in 2008 or so.

No doubt this is related to this problem :http://kotaku.com/5933454/blizzard-network-breached-change-y...

private server...