I'm not sure exactly what you are asking, but it doesn't say that avoiding the appearance of favoring athletes was the reason for the sanction. It says that staying the sanction would give the appearance of favoring athletes.
Why would it give that appearance is what I want to know. A student who had a limited term scholarship of any sort might move for and get a similar stay if it might affect their ability to use their scholarship before it expired. His status as an athlete should have no bearing on this case either for him or against him except for the fact that one of the sanctions against him was his ability to participate in intermural sports. If they want to go down that road they will probably be required to provide evidence that similarly situated athletes and non athletes have been similarly sanctioned. Maybe the non-athletes have had something other than their sport eligibility taken away, but still similar.