Now it appears to me that the FS pilot is saying he was performing a go around,
From the AMA letter.
"the biplane came around, the pilot apparently aborted his approach and decided to make a
second smoke-on, low pass down the runway."
That is not a go around, and because there were people near the airfield and the FS plane was not landing or taking off, it broke the FARs.
IMO the FS pilot, the RC pilot, and theair bosswere at fault. I understood that the RC pilot thought the air boss was his spotter. But, obviously he was too busy talking on the radio to be a good spotter.