The entire reason for Other OS was so it would be taxed differently in the EU, which taxes computers less than game consoles. Once the BOM was low enough (and they transitioned to the slim), the difference wasn't important and they nixed Other OS. Geohotz' hack was merely a further impetus to get rid of it on the early "phat" versions.
That is NOT the claim. The claim was that OtherOS was removed from the fat PS3s. How else would Sony have undertaken a lawsuit about OtherOS being removed as an advertised feature from the Fats?
Sounds like it was clear what Sony was doing.