A few thoughts on the situation:
1) The PGA Tour does not have referees assigned to matches during the round-robin portion of the match play. It would require 32 officials and they don’t have that many or want to invite so many outsiders to help out.
2) As Peter said in reply #1, if the players agree to a solution because they don’t know the Rule there is no penalty and the agreement stands.
3) MClutterbuck in #2, the PGA pros do not know the Rules very well. If there is any question about DJ knowing the Rules see some of his past incidents.
4) This is the only time they play match play without a referee right there so they don't know how to protect their rights when doing so.
5) JLarhman, DJ wasn’t making a stroke at the ball, he had no intention of playing it as a shot. He intentionally moved his ball in play without marking the location and so should get a one-stroke penalty under Rule 9.4.
6) SL, while there is no problem with two players agreeing to a half however if they knew there was a penalty and decided not to apply the penalty it could be a disqualification of both players. See Rule 1.3b(1), first bullet, second sub-bullet.
7) Peter Flory and Kalen, the Rules of Golf only cover the match being played. The Committee could still disqualify players who acted in this way for failing to act with integrity if they felt it was deserved. Similarly, Interpretation 3.2b(1)/1 says players can’t concede holes to shorten a match. The same could be applied to agreeing to half a number of holes. If they did and knew they weren’t allowed to they would be disqualified.
SL, I didn’t hear that DJ thought he heard KN concede. If so, Rule 3.2b(2) would allow the ball to be replaced without penalty, provided there was a good reason to believe that. If they agreed that there was a possibility that he mistakenly heard that, then they resolved the issue and all was ok. KN could have made him put it back, concede that stroke or agree to halve the hole as they did.
9) As to seeing opponents break Rules, I’ve seen things and ignored them since I didn’t really feel they mattered. I have a good friend who did this once and when his opponent asked him about it, he said, “Let’s wait until we tee off on the next hole to discuss it.” Once they teed off on the next hole it was too late to get a ruling so he could explain the mistake the player made without being required to apply the penalty to him.
10) SL, in regards to #14. DJ lifting his ball when it wasn’t conceded was a one-stroke penalty, not a loss of hole. Additionally, since KN was aware of the breach Rule 3.2d(2)’s Exception would mean that he wasn’t even required to tell KN under that Rule.
11) SL, regarding #21, you are correct, once they agreed to halve the hole, no need to continue.
12) Peter, in reply #22, In stroke play you have to hole out so, no DJ couldn’t just pick up his ball. If he did and teed off on the next hole he’d be DQ’ed (See Rule 3.3c) As to not allowing concessions in the pod system, the Tour could write their own rule for this and also to deal with all out penalties where a player might ignore it. If they are that concerned about it, they can play stroke play.’
13) As for KN telling DJ about it, I don’t think he was being a jerk about as some have suggested. He was probably trying to make sure it didn’t happen again when it might have mattered and offered a nice solution that resolved it in the most reasonable way. Players with better minds than DJ go brain-dead at times and it is nice to not be too hard-ass about it. That being said, there are probably a few players I can think of who might have called the penalty at that point.