Insufficient bid with added complication
One from last night at the club:
East (third in hand) opens 1H, S passes, W also bids 1H. Opps point out this is insufficient and before anyone can call the director W "corrects" to 2D. (This is not a typo). N declines to accept the 1H bid.
As I read Law 27, a) the 2D bid has to stand (27C, Premature Replacement) and b) E is barred from bidding again (27B(2)). N/S felt this was harsh and offered to ignore the 2D bid and allow W to go back to correcting his insufficient bid, i.e. either bid 2H without penalty or bid anything he liked while silencing partner.
I said that this was not in strict accordance with the Laws but if both N and S were agreeable I would accept it.
1) Was my original ruling correct?
2) Is it a) correct procedure (I'm sure it isn't) and/or b) acceptable in practice, at a club of less than expert standard, to compromise with the laws at players' request in this way?