If only you noticed it early... Sheesh, every heard of showing mercy?
It can actually be hard to tell if there are disconnects in a game or not depending on the player. Not every single player actually pays attention to the squids at the top. A lot of players, especially during Splatfests, focus solely on inking turf and don't pay attention to what's going on with the other team. So it's very possible that they didn't even notice that the other team was disconnected like that because they weren't paying attention to the squids at the top or they just didn't think about who they were seeing.
Secondly, everyone plays Splatoon differently. When it comes to Splatfests and Ranked battles, I am a player who will not show mercy to the other team. During this last Splatfest, I had quite a few battles where it was 4 vs 3 and we showed mercy to the Ninjas... It costed us the battles. So to be quite frank... No, I won't show mercy when it comes to a Splatfest because I'm here to win. I've had too many battles where pulling back costed us the match in the last minute.
Thirdly... This is not cheating. .-. If it's cheating, I would love to know how Team Pirates purposefully forced Team Ninjas to disconnect.
That would be cheating. Not showing mercy during a battle isn't cheating. It's merely playing Splatoon in one way that it was meant to be played.