Raiden's captain was following the rules, but I wouldn't have handled it that way.
As a captain, I have never taken the "late line-up exchange" penalty. Usually, there is just a miscommunication or other minor glitch that causes one team to be late. If you walk up at 5 minutes ahead of match time and no one has the line-up ready, you just tell them to do it. There will be some scrambling, but they'll get it. And then you just go play.
The two times I have considered taking it were times when the opposing captain was playing games. One actually hid in the bathroom to avoid the exchange rather than just coming to me and telling me about the problem she was having with a tardy player. The other hid in the parking lot.
When an individual player is late, however, I often have my players take the game penalty (loss of 1 game for 5 min late, 2 games for 10 min, 3 games for 15 min). The reason is that we play timed matches and the penalty is fair because the tardiness decreases the window the players have to finish the match. A slightly late exchange doesn't impact the match at all, so I don't feel comfortable taking the penalty.
When other captains enforce tardiness penalties strictly against my players, I'm fine with it.
-- Random Error Generator, Version 4.0
-- Master Moonballer