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I don't see what this has to do with liter bikes. I think the guy got a flash of "competitive rage" after being passed by your buddy on the straight, then tried to pass him back on the brakes into 1 and pushed it too far. I say this because the guy was clearly a novice rider, and novices will generally set up way to the outside and take big swoopy lines if they are just doing their own thing. This guy decided to set up on the inside of your buddy. Regardless of the outcome, I agree that this was a dick move, the guy should have given your buddy at least one corner before trying to repass.
Also, just a tip for your friend, you should tell him to rewatch the part where he gets up after the crash. It looks like he sat straight up without evaluating his situation. You can see another bike come by him while he is sitting there. That could have hurt, a lot. Then after he gets up, he stands right at the edge of the track. Not good habits.