According to the article "Other emails obtained by The Times show Mr. Fletcher treated the incident as a bounty and encouraged Preacher to provide proof of the

According to the article "Other emails obtained by The Times show Mr. Fletcher treated the incident as a bounty and encouraged Preacher to provide proof of the vulnerability, including sending a few lines of data from the database he had breached." So no, this was not disqualifying and he was told to do so. This is not extortion, just pay negotiations.