From a technicality standpoint, maybe RNDSQR was fortunate, but from a big picture point of view, many others including the Marda Loop area should feel fortunate. IMO it's a good development, and one that the city needs more of. The city is preaching better density and more walkable communities, and sometimes the rules need to be bent a bit in order for things to happen. Maybe the MU-2 requirements aren't realistic for this day and age, and current situation? It's only my opinion, but I think ARPs and zoning regs are good for guidelines but often developments (particularly those on a retail corridors) should be taken on a case by case scenario. It's similar to why we have judges. The law is what it is, but a human judgment can vary depending on the circumstances.
Based on my reading of the SDAB decision I would say that RNDSQR should feel very, very fortunate. The decision appears to completely gloss over how a set of simplified plans, containing no dimensions, attached as a schedule to a Direct Control bylaw that provides except as otherwise specified the rules of MU-2 apply, can be taken as specifying that various MU-2 requirements (eg. minimum MF ceiling height, minimum balcony dimensions, etc.) do not need to be complied with, or that Council's intention was to exempt the proposed development from having to comply with various MU-2 requirements. Council would have had no way of knowing that the proposed development did not fully comply with any MU-2 requirements other than those specifically addressed in the text of the Direct Control bylaw. In my opinion the correct result would have been a determination that the proposed development was approved as a permitted use with relaxations and therefore the appeal should have proceeded to a merits hearing to determine whether the proposed development unduly interferes with the amenities of the neighbourhood or materially interferes with or affects the use, enjoyment or value of neighbouring properties as per Section 31 LUB. I would also point out that Council's approval of a Direct Control bylaw in this situation, where the proposed development could have easily been approved under the standard MU-2 land use district with a few relaxations, is in direct contravention of Section 20 LUB.