That seems an overly salacious interpretation. You're reading from the same text that said he had nothing to do with the hiring.
Recommending someone with technical skills work at your startup only crosses a line when you're both porking them and directly making the hiring decision, which if we're taking this at face value, didn't happen.
True, but I think the point stands: it's not an impossible position, because the partner never had to work at Square in the first place. If he can get a job at Square, he could most likely get a job anywhere in SF/the Valley.
Recommending someone with technical skills work at your startup only crosses a line when you're both porking them and directly making the hiring decision, which if we're taking this at face value, didn't happen.