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Where we did everything we could to make it right including giving up all loot besides a scale
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I have no idea what went on with Sev, but if you were in the wrong, and think offering up all the loot except for the best piece of loot he drops is "everything [you] could to make it right", then it sounds like they were right to petition.
If you're in the wrong, even if it is an accident, you concede the mob and *ALL* loot. Full stop. That is what Awakened did here and still got banned. What you did sounds like it would be like if Awakened still killed the mob (which they didn't) and then tried to bargain themselves into the best piece of loot that dropped. Completely different scenario.