the campaign manager is not breaking any rules. "Preferred" doesn't mean that the applicant needs to have 10 merits in order to join the campaign but will have a higher chance of being chosen to be accepted than those who have less than 10 merits earned in the last 120 days. also, campaign managers consider the applicant's post quality in order to be chosen and in this case Janggernaut & 7788bitcoin passed that.
I think you have answered correctly that managers prioritize the quality and habits of posting participants and merit only as a rule to consider. Preferably get 10 merit in the last 120 days. This means that managers will consider it and make it easier to choose quality posters, but some participants are still very likely not to be selected even though they get more than 10 merit and managers have different views and maybe applicants are not eligible posters to be chosen and accepted in the campaign.
A concrete example is
this participant, he was accepted into the campaign and his name is on the spreadsheet. Didnt get the merit in the last 120 days, but the manager chose it as one of the accepted participants. This means that merit are not the main thing to consider, but the quality of the post, IMO. Merit is very close to those who have quality posters, but not everyone who gets merit is those who are categorized as quality posters.