Of course. The mechanical reels just stop where the computer tells them to. The odds of certain combinations hitting are much more complicated than simply each symbol’s appearance on a wheel.
There have been malfunctions reported before where the reel stopped at the wrong space, making it look like a jackpot.
Thousands of machines making thousands of calculations and movements per day, per casino. Things will happen.
Payoffs should be based on where the reels stop. If the wheels stopped "at the wrong place," indicating a jackpot, it should be paid. People don't stick coins in the machine to bet on where the wheels should stop according to some computer, they bet on where the wheels do stop.
IRT the original story, the machine indicated four out of five. I side with the casino if $100 is the proper payoff for that outcome.