About the students: As long as they didn't run a kind of "Language School" enterprise, it's just the typical overreaction. Still, I don't think, they've been deported in cages and put on a "naughty list".
The basic question is, how many locals can teach the Korean language or even halfway decent English?
Foreign "NES" tourists, who finished a TEFL-crash course in Phuket are not a solution.
When I determine "stupid laws" in my personal view, it doesn't mean it's the correct choice to ignore or break the law. Those young students surely got somehow along with the consequences.
But details help to clarify.
You didn't mention, that the student was attending a "degree in Thai language".
But, I ask myself, what is the degree? Master in translation? Master in Thai language history, the development of different dialects...Is it a master's or bachelor's "degree" course?
As long as dinosaurs are in charge, it continues with the one-step up, two-step back syndrome.
So, as you're partly agreeing about the average university degrees,
I'm curious about those completely "foreign-run" programs in the "mid-tier" universities.
The acceptance and efficiency within an ancient, traditional education-, bureaucracy-system, and the corresponding society are mediocre at most. Despite all mantras.
BKK is in Thailand, but Thailand is not only BKK.