He wasn't dressed like Santa, that's the thing.
The article mentioned that he was wearing "festive gear." Kinda vague. They may have just been referring to his white hair & beard. Maybe he was wearing glasses. Maybe he was wearing something "Santa-ish," like red pants and suspenders.
Bottom line is, the guy felt compelled to tell kids "I AM Santa Claus." He could've just as easily have said "No, I'm not, but I wish I were!" You have no idea what parents tell kids about Santa, and you have no idea how incredibly stupid some parents can be, and I can easily see some parents wanting to sue WDW because of something some guy who claimed to be Santa Claus did or said while in WDW. Might not be a successful lawsuit, but like I said, there would've been conceivably fewer problems if the guy never claimed to be Santa Claus.
Forget about the possibility of abduction or inappropriate touching of children. This guy, as Santa, could've said anything to these kids, and even though WDW would not have been responsible for any potential ramblings, it would be a PR nightmare to undo damage done by someone who's not an employee. The guy, for example could've said "Yes, I'm Santa, and I bring presents to all good boys and girls...except the Jews and the A-rabs, they can go..." and you can see how it can go from there. Suddenly, everyone's calling him Santa Kramer or or Santa Gibson & genuinely good people will have to explain why Santa's an anti-Semite or racist to their children. Then the guy hired to play Santa comes out and has to deal with angry patrons who are too angry and/or stupid to realize it's not the same Santa.
Sure none of this happened. All that happened was a guy was causing a commotion-a good natured, spirit filled commotion, but a commotion nonetheless-where WDW got concerned that things could escalate. There's a reason why the Disney characters have handlers nearby, it's to assist if kids start dragging down Mickey Mouse to either love him or play with him or see if it really is a mask. This guy, claming to be Santa, didn't really have a handler like that, except maybe hiw fie and who knows how good SHE would be in fending off sugar-crazed kids wanting to meet Santa? It was just a situation that could've escalated, the guy was doing nothing to really solve the problem, like, for instance, say he wasn't Santa. If WDW truly over-reacted, it still was for the better of intentions, and certainly deserves no scorn for it.
EDIT: There is potentially another problem, and perhaps a CM or someone more in the know than I can elaborate.
Because anyone hired to play Santa in WDW doesn't have his face completely covered, it's possible that he's considered Union Talent. Therefore, if someone is walking around claiming he's Santa at the same time a SAG-actor is hired to play Santa, it might create a conflict of interest where the union Santa could argue his job was threatened by "Scab" competition. Ludicrous-sounding, I know, but if there were a union issue, WDW would also have to take action to protect their relationships with the union.
