I use BTC-E since very early 2013 and I am well aware of the fact (bug) that if you withdraw coins, or do something else, that your balance is still the same even though you received all the coins in your PC wallet. However, it's not possible to use this balance in any way. I have tried it, but it doesn't work.
he noticed his available fiat currency balance had somehow doubled. Visual glitches like these are not entirely uncommon either. Oddly enough, he was able to spend that increased balance to buy Bitcoin, and the full amount was credited to his account.
That's just complete nonsense. The page on the user side may show him/her still having a balance (while in fact they have not), but the system (BTC-E) knows that you don't have any funds to buy with. This bug exists for quite some time, it is however funny that it is a point of discussion right now, lol....