It was a safety decision and ruled the same the entire day due to the tireless efforts of Pete Spotting down there. You are correct in the rule interpretation, HOWEVER, this was conveyed and done the same manner so all the affected players in all the affected pools played it the same way.
SAFETY FIRST was clearly the motto on this rainy day and hence the immediate change. It makes sense on that one. Safety is first, it was really more of a position that created a fictional OB/optional line. Similar to what I do at Cliff Drive on hole #12, where the player option on the hole can go to the drop zone (+1 stroke) instead of trampling down the hill for safety. Makes sense, and speed of play improves.
Hmmm. So a TD (or course coordinator) can designate a drop zone if a disc goes into an inbounds treacherous area, AND the player has the option to throw from their lie (if they can find it), or the drop zone? A potential issue with this would seem to be the player who is determined to find their disc and play from their lie, regardless of the danger of the hill. After 3 minutes of searching, is their disc considered lost, with the required throw from their previous lie plus one stroke? Or can they still go to the drop zone after the 3 minutes have passed? Or do they need to time the search and declare after 2 minutes and 59 seconds they are throwing from the drop zone (since that would be advantageous over re-teeing)?
I have no problem taking safety into account, but I wonder if this "new" OB along the woods on hole 3 at WW was played the same way on Sunday . For instance, if someone went 75' into the woods, they were probably happy to be throwing 3 from a meter outside of the woods. However, if someone went 1' into the woods, did they have to option to play from their lie? It just creates an odd situation where one player throwing might take a meter in from a fictional OB line and throw, then the next player throws from an area that was considered OB on the previous throw.