Well, the title of this thread is What would you do? Under the Communist regime, people who reported private conversations to official authorities were called denunciants and were universally despised by common people. I'm not saying that's what happened here, please don't take offence! It made me think of that phenomenon nevertheless.
From the published excerpt it looks obvious to me that a highly respected member of this community, professionally associated with the IT field, decided (s)he'd like to examine said software from a technical point of view, and confided to you (s)he'd like to do so. The transaction never actually occurred, however. I therefore don't understand why any of this should be discussed in a public forum. But to answer Tibbets's question, What would you do?, if I objected to the intention as strongly as Tibbets does, I'd simply discuss it privately with the person, expressing my misgivings about such intentions. Based on further feedback from the person, I'd then decide what to do next. Whether such private clarification of positions happened or not, I have no idea; Tibbets's opening post in this thread is a one-liner.
My suggestion: let's forget about this all & move on. Both persons concerned are wonderful members of this community & it would be a sad thing to see any of them go. Everyone is now forewarned that even attempting to buy illicit software may cause heavy commotion, and we might perhaps leave it at that. 