1. No unfair advantage obtained. There is no evidence that Michigan used their in-person scouting intel to get an unfair advantage. Every team scouts, every team gathers intel on the other team. Sign stealing is not illegal, Connor Stallions could have gone to buy a hotdog - it would still be against this rule (NCAA Bylaw 11.6.1).

2. NCAA Bylaw 11.6.1 does not exist to protect from scouting (less sign stealing). It was put in place as a cost saving measure because it doesn't make sense for ADs to be spending a ton of money of travel and tickets for staff when we could all just agree to adopt the standard practice of offering game tapes. Sign stealing is not against NCAA rules, that is incredible looking back at all this. Why would it be referred to as a 'sign stealing' scandal if sign stealing isn't expressly against the rules...seems like a misnomer.

3. Given the quote by the NCAA president in the OP...by all intends and purposes it looks like the NCAA does not view this as severe as others would want. You can speculate all you want. But this is an NCAA rule, clearly the NCAA gets to decide how severe it is. It doesn't look like they view this as something that would nullify Michigan's season ending results.

That is why its not cheating...
1. didn't give them an unfair advantage
2. doesn't break the spirit of the rule
3. the proper authorities said so