Passing mid corner does not have to be part of the track day experience. I've done almost 50 trackdays over the last 20 years, in the A and B groups and I've never had to pass anyone mid corner. If you're really faster than the guy you're overtaking, you don't need to stuff him late at the apex like that. You either make the pass earlier on the brakes or you get him on exit. The type of incident on video is unfortunately more common than it should be. Doesn't make it right. A little patience and common sense goes a long way toward not ruining both riders days.
He was set up to ride around the outside, not stuff him.