Reading further, it seems like they say they first generated some keys on-HSM, but then used 'test keys' (that were used to test wrap/unwrap of key material) instead by accident. Fishy.

They used the "correct" key for signing the CRLs (which of course was then an invalid signature):

> The CRL's were signed with the original private keys (which were supposed to be the correct keys with appropriate entropy) but given that this resulted in incorrect signatures, they were resigned with flawed keys.

And THAT is where I'm drawing the line between "honest mistake" and "gross negligence". For that to not raise giant red flags is an unacceptable failure in process and work culture.