I'm not a contest player, but I'm curious about this too. I wondered how "collusion" is defined in this context. I found this from the 2023 BCBC rules:

"Collusion of entries between horse players is prohibited, as is any attempt to manipulate the results of the Tournament. All players must make his or her own final selection independently of every other player in the contest. Participants in the contest are prohibited from coordinating their play with other players, such as (1) sharing the risk of losing amongst different entries of different players and (2) playing the same picks across entries amongst different players and coordinating wagers across different players. All players must make his or her own final selection independently of every other player in the contest. If Santa Anita or Breeders’ Cup determines, in their sole discretion, that collusion occurred, the participating player(s) will be disqualified."

Defining "independently" when people are sitting at the same table talking through races and potentially looking at the output from the same software seems like a slippery slope to me. I wonder if they have some evidence of prize splitting. And, like you, I don't know what kind of collusion would confer an advantage in a contest that covers lots of races and is based on $2 WP bets. The "final table" might be different, but I don't think that was involved here.