I think that's the thing that's puzzled me and I agree with your post. Minor Photoshop and photo editing is somewhat normal in the media. Whatever prompted this is bigger than Photoshop/ minor tweaking/ retouching.
A kill order is also a very big deal in the journalism space. And there have been 4 kill orders based on this photo, IIRC - AP, Getty Images, Reuters, and Agence France-Presse (AFP).
This reflects badly on Kensington Palace and this whole PR dumpster fire is a direct result of William's need for controlling the Press. BP and the King handled his cancer announcement and subsequent communication beautifully, whilst still giving the King privacy.