I'm not sure what I'm looking at either, but it appears to me (FWIW) that operator error is at fault here. The only way I can see this kind of failure is if there was only an inch or so of seat post inserted into the tube.
Regardless, if I was tasked with fixing the frame I'd clean up the top of the damaged seat tube and braze in another section of tube on top of it, with a reinforcing ring around the break. Then I'd be damned sure to insert the seatpost several inches into the tube from then on.
The simplest fix, FWIW, is just to get a seatpost with an internal expander. Then you just have to clean up the ragged edges of the break and call it a day.