This is pretty mindboggling. If thousands (by now, I suppose) of duplicated transactions is not a massive flow, then what is? Can you imagine if those were ATM transactions? Or some other mission critical transactions say with some expensive digital goods purchase. Would we still give it a pass?

But even more importantly, re-read this:

[...Duplicate charges can happen during service interruptions such as power outages. The system examines transactions that were being processed at the instant of the interruption and to make sure the account was charged, it runs them through a second time, which can cause duplicate charges for those transactions that had already processed...]

Nonsense. No (professionally constructed) system is designed with built-in failure generation mode. Yes, duplicated charges can happen, as in: it is technically possible that they would. But nobody who builds payments systems for a living would "run the transaction a second time to make sure the account was charged". The (ISO) protocol specifies exactly what to do and how to reverse the transactions that time out and, potentially, retry them. Plus the transactions that are deemed potential duplicates are eliminated also as a matter of process. This is supposed to take place on EVERY interface between parties as the transaction traverses the rails upstream and downstream. Incomplete transaction is supposed to be reversed before a retry is attempted.
What is most likely happening is that somewhere in the value chain upstream from the terminal, the exception processing has been screwed up. I suspect that the location in question is around the TSP (run by the IXs). This is the only "new stop" in the transaction sequence (actually 2 stops, up and down). The IXs may not even have implemented the reversal logic, who knows. I was told that they had to rush to make the deadlines.
It is also possible that the proximity stage of the transaction is contributing to the problem. But the terminal software is supposed to be the gatekeeper that makes sure there is only one outstanding, "in processing", transaction from each terminal. I would say that the terminal HW/SW providers and the merchant processors have had quite a bit of time to test the proximity retry logic with proximity cards (which in substance do not very much from mobile phone version as far as NFC is concerned).
Then again just reading a description of the proximity logic could give anyone a headache. So who knows.
My take on this entire topic is that we have just another Isis in the making... a solution in search for a problem.