I mean, the insurer in that case discovered that the client was defrauding them. If you steal $100 from someone's cash register, buy scratchy lotteries with it, win $200, and put the $100 back in the register, you're still a thief. That's the logic here: you gambled on a pirate trampoline and feel like you should have won.

I don't know if it really is the case that your insurance can be voided over material misrepresentations unrelated to your claim, but certainly there's no moral argument that it shouldn't work that way.