The copyright holder can set whatever license they want, including writing their own.

In this case, I'd interpret it as they made up a new licence based on MIT, but their addendum makes it non-MIT, but something else. I agree with what others said; this "new" license has internal conflicts.

The license is clearly defined. It would be misleading, possibly fraudulent for them to then override the license elsewhere.

Simply, it's MIT licensed. If they want to change that, they have to remove that license file OR clearly update it to be a modified version of MIT.