I'm fairly sure they were abusing the standard with this particular technique. Deferred messages are OK if they can be retried later and that's what the MTA will try to do. Permanent deferral I suspect is really supposed to mean "we can't deliver right now and we don't know when but keep retrying".
What this does not do is trigger "undeliverable mail returned to sender" messages, so the end user has no idea their message is stuck in their own MTA's mailqueue until the MTA decides it has tried enough and gives up, and MTAs will usually persist for quite some time.
Spammers won't care what error code you send them or even worry about deferral messages, which is why the temporarily deferred spam trick works (first send is deferred for 1 hour, if you are a genuine MTA and you try again respecting this, it works). But permanent deferral, as I say, is very user hostile. The user thinks they've sent an email, but it isn't in the spam folder of the recipient. The sysadmin then has to go and dig to find out what exactly happened, and remove the mail from the mailqueue.
Luckily so far as I know we are only emailing a single yahoo address.
tl;dr the technique they are using is designed to handle the case where the receiving MTA is offline temporarily. There is a spam defence trick you can use and I don't object too much to that, but they used it to implement their block list rather than outright rejecting, and set the timeout to deferred indefinitely, which is just bad.
