I don’t know anything about UCAS’s specific rules or how they interact with an individual university’s rules, but the basic principle is that students choose a firm and an insurance offer, and if they get the grades stipulated, they are given their first choice.
I don’t see how Cambridge can suddenly change its terms in a way that makes a mockery of the established system, and I’m fairly sure that a court would interpret the term in favour of a student and against the university.
I have no doubt that a lawyer would have been involved in the drafting of the term. It is, however, unfair and has caused unnecessary stress to some students. Cambridge could have achieved the same result (negotiating deferrals etc.) with individual students without introducing such a clause.
I agree with Xenia that the term should ideally be redrafted. However if Cambridge decided to try and rely on it to force a student to move (which seems unlikely now) its response to The Times and individual queries would be likely to be taken into account, so would hopefully prevent such an outcome.
A foolish and rather insensitive move by the university, but hopefully no harm done to the students, for whom this potential further level of uncertainty would have no doubt been very unwelcome.