This seems to be a moot point. The officials were the ones who made the mistake in the semifinal game. Generally speaking, when a poor decision is made by a referee in a game it is not reversed (especially after the game has been completed). At this point, it is history. The officials did not disqualify the player during the game. This may have been a mistake by the officials. Nevertheless, a technical was assessed but no disqualification was issued. With no disqualification, there cannot be a suspension for the next contest. (In my six years as a varsity head basketball coach, this was always my understanding.)
The KHSAA was wrong to analyze this officiating decision after the conclusion of the semifinal game. They were horribly wrong to wait until 7:00 p.m. to notify Mason County that their player would be suspended (for an infraction that was incorrectly interpreted by officials in a prior game). This was unfair to the players and coaches who were not able to prepare mentally and physically for the next game (as they would have if they knew a starter would not play).
If the officials make a mistake as they did in the semifinal by not disqualifying the player, then all parties involved must live with the decision. As the old saying goes "two wrongs don't make a right". The KHSAA intervened where and when they shouldn't have. Subsequently, they realized this and made the correct decision by allowing the player to participate.