I know this is all happening automatically without evil intent, but when you step back and look at it from again from the point of view a maliciously cloaked addresses then one that is doubly cloaked is very very suspicious.
I don't think app103's issue is with the validity of how bit.ly might be interpreting a double-shortened link. (Double shortening?)
I think her issue is with bit.ly's refusal to accept responsibility or do a fix once their
error has been brought to their attention.
I'm not sure where bit.ly is coming from, but I'd suspect they've been aware of this problem for some time and either: can't be bothered, are in denial, or scared silly.
Reputations are valuable. There are
legal repercussions for those who damage one. And that liability applies even if such harm was done "unintentionally."
Unintentional actions may be viewed as mitigating factors in a slander or defamation charge. But only if the party who did the harm responded in a timely fashion; did everything in their power to minimize the damage; and could show how steps had been taken to prevent it from happening again.
Saying something was done "automatically" may let you argue your intent wasn't malicious. But to just say "oh well" or "sorry, we're working on it" doesn't meet the requirement for acting in a timely and responsible manner. Nor does it remove the liability for any harm done.
Society doesn't expect all our actions to be error free. But it does expect us to accept responsibility for our mistakes. And
to make good on them.