Assuming they didn't get to keep the million (and presumably Tecwen his grand as well), a custodial sentence would have been a terrible waste of public funds.
They suffered the shame and nationwide humiliation anyway and whilst they did technically steal £1m, it was money that was freely offered to them in return for answering several arbitrary questions, which could have randomly fallen within Charles' areas of knowledge or not.
In no way is it the same as if they'd conned an old lady out of her life savings by claiming that her house was about to full down without urgent massive works.
It makes a change from the norm, when we routinely see benefit and other fraudsters and financial criminals - especially anybody who steals from, embarrasses or otherwise upsets the government - locked up in the limited prison spaces available whilst violent criminals who represent a genuine danger to the public are left to roam free.
I'm not saying that people shouldn't be punished, but prison should be used appropriately. If you found out you were being housed next to a convicted criminal and could choose between the rapist or the council-tax evader, you know full well which of them would leave you permanently terrified and which one you wouldn't feel threatened by at all.