Yes, but it does seem like the students were cheeky and got away with it. They played the game according to the rules, but there is the issue of gentlemanly conduct.
I think the question hinges on whether or not it was an intended consequence. The professor said:
“I had decided that I am sticking to my policy, they had
decided to boycott the exam, and that was pretty much it,”
Froelich wrote. “The students learned that by coming
together, they can achieve something that individually they
could never have done.”
This seems to indicate he approves. Though now that the previously theoretical concept has been proven, he has changed the rules so that if everyone gets 0 points, then everyone ends up with 0 percent too.
I got the impression that the professor had anticipated this as a possible outcome, and was intentionally challenging the students to overcome the coordination problem, as he didn't think they'd be able.