I guess next time they'll use it properly and not get caught.
Agree. What they meant by 'improperly used' is the photographer was not 'professional enough' that it get caught. The 'properly used of editing software' means their fake pics would never get caught.
The sad part is that the photographer perhaps simply gets a 'warning' (not to be that unprofessional next time), and that's it.
I doubt it. His ass is grass. Even if you don't believe Reuters is interested in integrity, you'd better believe that it's interested in not being publicly embarrassed like this. The editor who approved this to go out on the wire is probably packing up his desk, too (or possibly alone, if he did the hack Photoshop job).