It is not good, but it is not dispositive either. It means that UConn will have to show that it's firing was based on KO's misdeeds, and not that the program was losing and unable to keep players. They will have to show that, at the time they fired him, they knew that he had material violations of NCAA rules and they will be o.k. However, what they found out after the firing is unlikely to help UConn, and they will have the burden of showing that the NCAA violations that they knew of at the time were not pretextual. Said another way, that they weren't firing him because the program was falling apart and this was just an excuse. KO's team will be saying that of course UConn had already decided they wanted KO out, because the way UConn threw, rather than aggressively defended, the NCAA investigation was so the NCAA would give UConn cover to fire him.
Many here are following this more closely than I, but from what I see and know I would think that, after this ruling, the decision could certainly go either way.
What is ironic, however, is that those on the board who desperately wanted him out for losing are the ones now saying the NCAA violations make it o.k., even though their minds were made up ahead of the investigation. The factual question I don't know is will the evidence show that UConn's mind was made up at that time as well.