I wonder if the organiser's mate knows that he's playing for free while other players will be getting expenses money?
And to address the original point -- yes I share your concern, it's a very weird situation and as the person arranging the dep I would have been just as unhappy with and embarrassed by it as you are.
(Also, this £100-behind-the-bar nonsense needs sorting out before you play there again, but as you say that's a whole different subject.)