To put an official end to this, it was discovered that video was intensely edited.
He cut out major parts of that video, making it appear like the Xbox Live Moderator was banning somebody without reason.
The person who recorded this video and spread it around (iTzLuPo) was banned due to the fact he belonged to a clan of modders/glitchers, which he participated actively with on Xbox Live.
He, being butthurt as he was, thought it would be smart to make a big deal out of it and try to blame it on the moderator.
Thought I'd clear that up for you.