- What is the agreement? If they play penalty doubles of preempts, then that's what they do. It's legal on any chart (Basic Chart: "All doubles and redoubles, and all calls by both sides after a double or redouble.") as is any other agreement. So, yes, the auction is a totally legal auction, and we can't "take away the double".
- Were the opponents made aware of this agreement appropriately? If it is a penalty double, then it is Alertable (below 3NT, not any of the exceptions), so no.
- Did that cause damage? You'd have to see how the play went, and whether the opponent would have saved a trick or more if they played for the diamonds to be in the doubler's hand instead of the passer's. But it looks like reasonable defence leads to -3, so likely not.
- If East can come up with a good argument for why he'd pull a double with the diamonds on his left rather than his right, then maybe that is another potential adjustment (though it looks like 3♥x, the best option, is -2 - and we would likely have to weight 3♥x and 3♠x (and a reasonable fraction of sitting for 3♦x, unless his argument is *stellar*) as well?)
Review: your opponents are not required to play the same system as you, or even a good one. They are, however, required to ensure it is legal in their game, and that the opponents are aware of what they play appropriately. *If they do not do so, adjustment is not automatic; it is up to the director and there has to be damage (L21B3, L47E2b)*.
There were no infractions through the double (though perhaps immediately after) - so no part of the adjusted score can consist of 3
♦ undoubled. If knowledge of their agreement would reasonably lead to a better score in 3
♦x, or lead to a different contract than 3
♦x that leads to a better score, then that can be assigned. As a director, the NOS (West for the play, and East for the bidding) would have to convince me that the *correct information*, not just the result, would have made a difference (I can't see any reason why where the 5 diamonds are makes a difference to his pulling 3
♦x. I'm willing to be convinced otherwise).
Unless they can get 100% of -300 and beating those that get to 3NT (or 5
♣ making on unwise defence), I don't see this gaining them much. I don't *think* I'm giving them 100% of -300, but I haven't heard their arguments.
Please don't mention A+/A- (either because "club directors do this" or L12C1d). That would *definitely* be "they made a (technical) mistake, we get a good score". These are the hands where "automatic A+/A- for any infraction" proves its wrongness; E-W are getting a bad score on this board because they hit the only pair in the room who has the system to handle this hand, not because they failed to Alert it; 60% is *not* rectification.
When I go to sea, don't fear for me, Fear For The Storm -- Birdie and the Swansong (tSCoSI)