Hi Rbud: Welcome to the forum.
Your specific example is a bit confusing to me because it seems like UTG checked, but he should be calling the Big Blind. In any case though, as I understand your general question, the button was not moved after the previous hand was over, and the next hand that should have been called a misdeal was permitted to continue because "substantial action" had already taken place. It appears to me that your question is: why is this the case, since the players aren't playing with the cards that they would have been dealt if the button was in the proper place.
In general, I think it is critical to note that each and every player at the table shares the responsiblity to ensure that a deal proceeds as it should if no errors had occurred, which also includes correct placement of the dealer button. Sure, it is part of the dealer's job, but every player is also equally responsible to prevent irregularities from occurring. This is to protect everyone in the tournament. We also want to encourage players to bring attention to any potential irregularities as soon as possible. Furthermore, players who know that an irregularity has occurred (or as another example, that there is a problem with the deck) should not be allowed to benefit from that knowledge by withholding that information.
If substantial action occurs, it is too late to call a misdeal. The hand should be played out, and the position of the button corrected
after the hand is over. If this was not the rule, it would not provide anyone with the proper incentive to speak up when an irregularity has occurred.
Suppose, in theory, that the rule was that a misdeal would be called anytime something went wrong in the "dealing and blinds phase" no matter when the error was discovered. A player could choose to say nothing because he has a "good hand". Then later, if he doesn't like how the hand is evolving (e.g. he bets, someone else goes all-in, he doesn't want to call but he also doesn't want to lose his bet), he could point out that the button was in the wrong position. Should he be entitled to get his bets back, and the hand cancelled? On the other hand, if he is able to win the pot, should we reward the player for saying nothing and not bringing the irregularity to the attention of the table?
We don't want to promote this behavior - it is not in the best interests of the game. For me at least, this is enough reason to justify the "substantial action" principle when it comes to deciding whether or not a misdeal should be called. I'm sure some of the other TDs on here will have additional thoughts.
