I mean... It’s technically true, but unfair. Back then you could add anyone to moderate your subreddit and they didn’t need to accept, they were just made a moderator. He, and every other high profile person on Reddit, were probably listed as a moderator in thousands of subreddits back then.
There’s plenty to hate Spez for (like allowing the subreddit to exist in the first place).
You are correct about that, but Spez also created a custom unique Pimp Hat award for the top mod of r/jailbait so I don't think he necessarily hated the situation.
I will add that Pimp Daddy was most likely awarded for his role as a general moderator of NSFW subs during Reddits early days and not specifically for creating r/Jailbait, but violentacrez was controversial in more ways than just creating that sub and he got the award all the same so it's still not a fantastic look.
Yeah this accusation is dishonest to some extent, but it's not entirely without teeth. If Huffman was decent human being he should have removed himself, not stayed as a mod for years.