I wasn't the person who handled but I've looked through the video and I think whoever did made the right decision.
The first fight with the lagging player the hits he does get are all possible as far as I know, also to me when the lagging player is fully past him and he is going down the ladder (at around 7 going into 8 seconds) he swings but doesn't get the hits until he turns around, it's a fast paced moment but I've replayed a few times and I don't see him getting hit until he comes back up again almost to the top of the ladder. I feel like if it were kill aura his head would have snapped straight away to the player going over him and he would have still been getting hits while he was down the ladder.
At 0:23 as they run of the camera he is also missing hits as far as I can see, it's unfortunate that a major point of the video runs out of view but to me I see him miss at least one close hit as they are running out of view.
At 0:30 I can't see him attempting to hit the other player even though they manage to hit him.
When looking at evidence we need to feel sure enough that the player in the video is cheating, if we look at it and think "oh that looks a bit dodgy, but it could be explained by this. Oh and he actually doesn't get hits there." The video doesn't reassure enough that banning them is what is right because st the end of the day, if you ban just because you feel there is more to the situation but there isn't it will backfire and cause lots of problems.
I would have been 50/50 if that on this video which for me wouldn't be enough for a ban, the only thing really that strikes as cheating is how he looks at players when hitting them but if you practise enough with accuracy it's all possible. All you have to do is keep the crosshair on the player as much as you can.
Obviously there is the option that the player is toggling but that is hard to have evidence of if the player is only using kill aura, what you see as toggling could simply be him having his good and bad moments.