I call this the "headless chicken" style of directing. I apologize for such a pejorative term. But what is happening is that the director is trying to follow the laws (mindlessly), but is ignoring the fact that the rules were not constructed to handle this situation. Then the director doesn't look at wherever he/she ends up. The ruling could be equitable, or not equitable, but the director doesn't care.
Ruling that the three diamonds are penalty cards is making a headless-chicken decision.
The Thoughtful Director
The completely opposite style is simply to give an equitable ruling. For example, consider this situation: The opening leader wins the first trick. Somehow, opening leader then leads the exact same card to the second trick (as that just won the first trick) and everyone follows. Finally the irregularity is noticed and you are called as director. How do you rule?
Mike Flader, Associate National Tournament Director for the ACBL, said (in the August 2007 ACBL Bulletin) that he would restore all of the played cards from trick two to the player's hands, then play would proceed. He would not assign any penalty for prematurely-exposed cards, but he would protect declarer if premature exposure of the defender's card was damaging.
Flader makes no mention of following any rule, nor does he provide any rules to justify his ruling. I do not see how any application of the rules could lead to this ruling. Flader does not provide any justification for his ruling, but I believe he was just trying to make an equitable ruling.
Pretending to be a Headless Chicken
There is a third style. One director suggested requiring the dummy's opening lead out of turn to be retracted, because the dummy cannnot play cards. The three diamonds are then the simultaneously play of three cards, and they can be retracted without penalty after the opening lead by dummy is retracted.
Why did he choose this ruling over making the three diamonds major penalty cards? In his words, "Now I have found my excuse for not penalizing [the defenders]." In other words, he pretended to be a headless chicken to arrive at a ruling, but he thought about whether the ruling was equitable before making it. When the first thing he thought of was not equitable, he returned to the laws to find a different ruling that was equitable.
Because he thought about equity, he was not being a headless chicken. Instead, he was just pretending to be a headless chicken. But I don't know what he would have done if he couldn't find a ruling he liked. Would he have felt forced to make an inequitable ruling?