The government made it clear auto approval would happen and they would confirm later. I guess its kinda a cover your ass policy but some people urgently needed the funds.
The government didn't make an error in their favor, the applicants played the game without knowing the rules
I think we also aren't giving humans enough survivability credit. There have been native peoples who have lived from deserts, arctics, jungles and everything in between. A lot of this often relys on the natural environment but humans are surprsingly resourceful. Anything modern societies consider junk or trash now could still be used be it as fuel, makeshift tools or they repair it enough to use it. So long as the people in the society can reach sexual maturity, humans will live on.
Theres an episode of survivor man where he spends a few days on an arctic coast and a lot of what he relied on at times was the trash that floated in from the ocean. Something like a broken plastic barrel can provide shelter.