I don't know what happened in current case. In the Knight Capital case, KC clearly didn't intend to send those erroneous orders. And if those trades were not annuled, KC would not be able to settle those, since the trade loss were larger than the collateral KC put up.
The trades were not annulled, because NYSE ruled them not "clearly erroneous". Which is why it is was an existential mistake, not just an embarrassing one.
