To be fair, that was back when people could add any other reddit account as a moderator to a subreddit without their knowledge. Still, I think he was still listed as a moderator when r/jailbait was banned, which if that is true is entirely inexcusable.
They were 100% aware they were hosting a "not technically child pornography but we're going to use it as child pornography" sub, but there's no subreddit degenerate enough that they'll ban it while it's profitable.
For those who don't know, look into the Creator of that sub. It's a crazy ass conspiracy type thing. Google Lake City Quiet Pills (link goes to a video from Nexpo on the subject) to go down a wild rabbit hole that somehow includes that sub. No child shit or whatever but it's hella interesting.
Yes, you can appoint anyone as moderator and they'll be none the wiser unless they happen to look at their own profile page. I think the target must have comments/posts on the community first but not sure if it can be bypassed in the backend.
I never visited that subreddit, so I have no idea of the actual content. I don't know enough about the situation to be able to post more than I have without completely making stuff up, and in those situations its smarter to not say anything.
"A wise man speaks when he has something to say, but a fool speaks when he has to say something."