If I owned a site like X, I'd want some way to reclaim user names in cases like these. I don't doubt X is sneaky or gross about it, but it's a reasonable need too.
Putting the name on a marketplace is weird. I'd simply free it up if it was my platform, and send a note to the original owner explaining what happened. Though I'd send warnings as well.
Something like 'Hey, you haven't [met an engagement metric] for [n period of time]. We're going to shut down your account to make space for other people'. People could game this, sure, but I suspect it would be better than what happened to you.