If Nate disagreed with what Jerm was doing (do we know that he did?), he had plenty of options available to him.
Option 1...speak up and question what Jerm was doing as he was doing it. It's not like Jerm snuck up and threw from the incorrect lie before anyone could stop him. He explained what he was doing and why, including making a point of clearing some debris from that lie. There was plenty of time to say "hey, are you sure that's legal?" and, you know, pull out a rule book (or a phone that could access the online rule book) and look it up. If it was still a question after looking up the rules, on to...
Option 2...suggest Jerm play provisionally from each position and bring the situation to the TD. I honestly don't think this would have been necessary if the rule book had actually been consulted, but let's go with the premise that the rule is worded in an oh-so-confusing way and call it inconclusive. The TD, in conjunction with the PDGA (an event that big, even if there isn't a PDGA staffer on site, you can get one on the phone), could have sorted it out in a second.
Option 3...call the foot fault. Again, I don't think it should have come to this because I think it should have been halted before Jerm threw the shot, but let's say he does in spite of any protests and without declaring provisionals. Call the foot fault. Maybe it's seconded, maybe it's not, but at least it's on record. If it is seconded, Jerm still has the option of appealing to the TD, arguing his case that he was legal, and try to have the penalty removed from his score. Not that he'd succeed if the TD knows his rules, but the option is there.
Ultimately, there should be no "what could Nate have done?" excuses. He had choices if he questioned what Jerm was doing. I'm not sure he questioned it, at least not in real time. If he did, and he didn't do anything about it, that's his own error. Nothing was "stolen" from him.