I ran the 800 many moons ago. I've run an 800 track race or two for fun since. I think starting in lanes in a 9 person field is pretty ridiculous. (Also the runner in lane 1 has an unfair advantage because of the rail on the inside and the runner in lane 9 has an unfair disadvantage because of the rail of the outside; it's natural for us to run a little further out from what we perceive as danger. A curb is dangerous, a railing looks just like a curb, so inside lane runners subconsciously drift a step or two towards the outside and outside lane runners drift a step or two towards the inside). I think alley starts where the lanes 5-8 break to lane to lane 5 and lanes 1-4 break to lane 1 then merge at 110 meters would be fairer and safer.
As to why this happened, it's because whomever was next on the time qualifier list appealed (or more likely their coach appealed). It looks to be Tinoda Matsatsa from Georgetown.
And here's where I think we get this thing wrong: Matsatsa wasn't even in the heat race with Holt. The coaches of the people in the heat race with Holt said "yeah, it didn't make a difference," and chose not to appeal. But when you're in another heat, you can appeal if you just miss a time qualification. I think that's bonkers, and that appeals should be restricted to people in the same heat.