How do I put this plainly, and objectively. Ah here's a method of going about this:
Both parties are at fault for this, firstly lets start with M69ty.
As someone who has had their own share of issues or non-issues depending on who you ask we have gotten a long decently for the most part. However he does have a streak that he likes to do what he wants. I remember a couple times of him being asked if he wanted to help out and be a mod and he responded with "No, I already don't think I can do wrong and becoming a mod would make that worse." So to say that he doesn't have this mentality would be silly. Do I think him posting a picture of the two characters kissing is inherently wrong? No, however I DID see the several people ask him to stop posting it (As he posted it a couple of times.) Should he of stopped posting it? Yes. Does this warrant a 1 day ban? Maybe.
Lets move on to Fish,
Let me start this off with I am friends with fish inside the community. Do I think he gets the raw end of the deal with running this subreddit? Fuck yeah he does most of the people in this subreddit like all subreddits can be toxic and rude. No one ever thanks him for organizing giveaways or checking mod mail every hour like I know he does. Yes it can seem like he is strict at times but he's following the rules that he set down. He doesn't just make up new rules like certain admins I know from other subreddits. Should he of banned M69ty? Probably not, HOWEVER It was a one fucking day ban. And it didn't even last that long.
Should M69ty of deleted his posts and had the whole "I'm taking my ball and no one else can have it mentality"? No. Because that's immature and shows no concern for the rest of the community. Even if he states that he wanted to back them up and have someone else post them the real point is. He didn't. I understand rage gets the better of us sometimes. However actions speak louder than words.
Has this whole thing affected the community? Yes, should it of over something so stupid? No. Did both sides over-react? Yes. Are the mods more useful than the average redditor gives credit for? Yes. If you don't think so, then quite frankly they don't care. I've met them all. I know most of the people who participate in the dokkan chat and trust me when I say the mods do a lot more for you than you think.
TL;DR Did M69ty Fuck up? Yes, should he of been banned? Probably not. Was he warned? Yes. Did Fish over react? Probably. Did he rectify the situation? Yes. Does he deserve your ire? NO. Cut him some slack and shut up.