Yes to both above.
The dealer was probably embarrassed for having mistakenly mucked A's hand, and was trying to smooth things over (incorrectly) by offering him his bet back without calling the floor at all. And it almost worked, since no one else called the floor immediately, as they should have if they wanted to object, but waited until the hand was over.
If anyone had objected in a timely way, then A's bet should have stayed in he pot (just another Protect Your Hand story), (and perhaps he should get a meal voucher). But B's claim, especially after the hand was over, was ridiculous. And killing the entire hand and redistributing the bets is even more ridiculous.
So, actually, given the timing of the complaint by B, and the lack of complaint by C, I tend to agree with Steamraise that the floor's actual decision was not bad. Once the hand had played out, you can't give B his bet back, and C apparently wasn't asking for A to hand over his refunded bet. So I can easily picture a competent floor stopping right there.

Whether he called or shoved, my opinion doesn't change.

And, even if the Floor was called immediately, why do feel that Player B's complaint would've been 100% valid? Yes, it's valid in the sense where we might believe that he WAS just trying to isolate the bad player(although risking a $450 stack to achieve that seems pretty bad, as well, but whatever), but, it's not a valid complaint in which the Floor should take his complaint into consideration and refund his money or declare the hands dead. I agree that Player B's plan may have backfired, but that's poker. The only player who has anything to complain about is Player A. All other complainers are just being whiny, results oriented tools(if you ask me).

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His complaint is valid that if you take player A's money out of the pot YOU ARE SCREWING PLAYER B over. And if you are going to make the bad ruling of giving Player A his bet back, I see no reason why you shouldn't then Give Player B his money back. That would be a bad ruling too. But if the floor isn;t going to make the correct ruling of leaving the $120 in the pot he should at least be consistently wrong.

Ah, the ol' 'two wrongs make a right' theorem!

Not really. I haven't suggested at all that this would make it right. You know what ruling would make it right..... not taking A's money out of the pot.

Everyone could learn a lot from these two ...

If I'm lucky enough to make a floor call where the players actually involved are happy, whether the player in seat 9 who wasn't even dealt in the hand thinks so or not, then sometimes these are the right calls.

Ok I see where you're coming from re: Player B. You were stressing how bad the ruling was that it actually gave B a valid argument.

we're still on the same page then

Who objects to a player who is not A, B, or C insisting that the floor be called before the board is dealt out?

If Floor was called immediately and did allow A to have his bet back then B's shove is not allowed because A is no longer opening action pretty simple.

Since when are you not allowed to shove when action is on you for the first time?

Angus's Rule of Poker #17:

If the hand starts to go fubar, call the Floor immediately, not after Showdown. You don't close the barn door after your chickens have hatched.

From the way the way OP is typed I get A limps, B raises, C calls, A makes it 120 and B shoves. If I am wrong how did the action go?

Qft (speaking as the one who has to come unravel these spots)

Were there actually no objections until after the board ran out? The main issue here is that there really isn't anything the players can do to stop the dealer from running out the board, especially if it's a dealer who likes to make up their own rulings. I've definitely witnessed situations in which it took several attempts to get the dealer to stop the game and call the floor for a ruling. I just find it hard to believe that the money could have been taken out of the pot and nobody objected prior to the board being run out.

It looks like two limpers, A spaz-raises to 120, B shoves, C calls.

My dude, you keep misreading the OP.

Think both player B and C should be asking for the 120 to stay in tho pot. Cant let a player take back money in the pot just because they didn't protect there hand. Also possible to angle this way. Once B shoves he could know he is no good and either sneak cards into the muck put them somewhere where dealer might muck them. This happened in the WSOP where a women has AA, she says, Ship over a raise and the dealer accidentally mucked her hand. They let her take back her stack but she had to leave the amount to call the original raise in.

As played think either floor ruling is fine. Harsh to make player A but the money in now but that really is the correct ruling