I think you are going to have a hard time drawing a definitive line where a "hobbyist" becomes "commercial". I"m on this forum almost every day and frequently search Craigslist for good buys. I see the same people continuously posting ads and advertising various corals and "frag Packs". In the pictures they post, you can see dedicated tanks, where they have dozens, if not hundreds, of frags. For some people, it is an extension of their aquarium and starts as a way to enhance their personal coral collection. However, there's a point when a hobby becomes a business. Here is the legal definition of an aquaculture facility (FSS 379.2523):
“Marine aquaculture facility” means a facility built and operated for the purpose of producing marine aquaculture products. Marine aquaculture facilities contain culture systems such as, but not limited to, ponds, tanks, raceways, cages, and bags used for commercial production, propagation, growout, or product enhancement of marine products.
There is an exemption that states:
"Facilities used by marine aquarium hobbyists."
However, when someone has a significant amount of money invested in large, dedicated, frag tanks, and they are regularly (or continuously) advertising their coral for sale, its not hard for an officer to make the case that it is a for-profit operation.
I don't know the specifics of the case that started this discussion, but I know a thing or two about these types of operations. Usually, in cases like these, undercover officers make multiple purchases from a suspect before making an arrest. By doing so, they can show a pattern of behavior by an individual. The officers make decisions on whether to charge someone based on the totality of the circumstances. I think its unlikely that this person was selling frags from a frag rack in his aquarium, or even from a small frag tank. If he was, then shame on the officers.