When you contact the shop and instructor, realize that you only have limited information. PADI occasionally has a hair trigger, and you may be seeing the unfortuante effects of this.
I know nothing about the situation the poster referenced, but this hypothetical example shows how things can blow out of hand.
In the most innocuous example, Joe the instructor has a student panic during an Open Water referral dive. The student bolted to the surface, and later complained of numbness and tingling in a shoulder. Joe administers first aid, places the student on oxygen, and alerts EMS for transport to a hospital for treatment. Joe then writes out an incident report and faxes it to PADI.
PADI opens a file, and then mails a letter to request copies of the liability waiver and training records for this student. The letter demands a reply within 2 weeks or else PADI will place the instructor in suspended status. The international mail being particularly slow, Joe doesn't receive the letter for 4 weeks. For two weeks he has been in a Suspended status and didn't even know it.
It gets worse.
Joe gets PADI's letter, and photocopies the file and mails it to PADI the next day. International mail can be really slow.
When PADI hasn't received a reply to their first letter in 2 weeks, they placed the instructor in Suspended status and send out a letter to inform him. Two more weeks pass and they send another letter threatening a Quality Assurance action. They mail this letter the day Joe gets their first letter requesting the file.
Two more weeks pass, and PADI still hasn't received a reply from their first letter. They mail out yet another letter that a Quality Assurance action is to be taken and the instructor must sign a teaching agreement to regain teaching status. Two days later PADI receives the documents they requested in the first letter.
Joe starts to get increasingly dire letters from PADI. He doesn't worry because he sent out the requested documents as soon as he got the first letter. He teaches a course or two and submits the PICs according to procedures.
Even though PADI has all of the documents they requested in their first file, they have not received the teaching agreement from Joe. They stop processing PICs for Joe's students.
Some variation of this has happened so often that it is frustrating. PADI sometimes mails critical paperwork requesting an action, and then proceeds to take an undesirable action before you ever receive their letter.
We hire a lot of instructors from the UK. Usually they are set up with the Bristol, England office as their home office to process their paperwork. When we hire them, we notify PADI to change their home office permanently to the California office.
In about half the cases PADI sets up a Service office arrangement (temporary six month arrangement) instead. When six months have passed, PADI mails a letter saying that they are terminating the Service Office arrangement and switching the instructor back to the Bristol office. The first notice we get is when we suddenly cannot process PICs for that instructor using the PIC online web based processing. The letter arrives in the mail 6-8 weeks later.