It’s unclear what the student lied about. The article makes it sound like the student may have lied about living in North Dakota, maybe even their name (wording is “Dean Adam Ployd called the student Katherina Lynn”). I doubt this was exaggerating about ECs or similar. What is clear is that the student was admitted to Yale, remained at Yale for more than a month (likely until getting flagged due to roommates/dormmates complaining to admins), and removing student due to submitting falsehoods is rare enough to be newsworthy.
I agree that honesty is the safer and more virtuous choice that I’d recommend to students on the forum, but I don’t think this article proves that persons who lie/exaggerate don’t benefit. I expect the tremendously more common result is persons who lie/exaggerate come out ahead, typically with little consequence. I’d make a similar comment about academia as a whole, not just college admission, in spite of the regular news stories about university professors/presidents being penalized for falsifying research.