was
technically breaking the letter of the rules and so "was at fault", but I can't really fault him. Y certainly is outright cheating. He knows
he knows too much about the game yet replaced in anyway, he should not have done that. Furthermore, X fessed up and complained as soon as Y replaced in, supporting his "moral rightness" in this issue.It's the fundamental "Mafia runs on the honour system" issue; if players set out to cheat or conspire to cheat, we'll always have a hard time stopping them. People need to be honest else there's no point. In this case, Y used information given to him in good faith to cheat.
The one caveat would be if X gave Y the choice to receive the information or not. If Y intended to replace into the game, he should have had the option to refuse any information offered to him by X (or others) so that he could remain a viable replacement. If he wasn't given this choice by X, then X was at fault for ruling out Y as a replacement against his will.
I don't see any problem with people not in games talking about a game (perhaps with privileged information) as long as they accept they are no longer potential replacements. Clearly this can be problematic if replacements aren't available because they're all discussing the game in private, but does that happen?