Smack I can't speak to the US CG specifically. You are obviously more informed than I on the detail there. In my part of the world though, interestingly the rescue response that is triggered for a Mayday and a Pan Pan is almost identical. ( I am NOT suggesting anyone incorrectly call a Mayday for a situation that is a PAN PAN).
That is really odd. A pan pan is a communications to alert authorities and SAR that something is not working on your boat and that you have a serious problem. But that you or the boat are not at risk. SAR follows closely the situation that can turn in a Mayday or can be sorted out (like it was in this case) and the urgency situation is finished.
On a Mayday SAR deploys immediately all the safety measures that they can provide: They send airplanes to find the boat, helicopters for the rescue and they divert ships for the rescue.
It seems the same to you?
My point is that radio contact would have been established between the CG and the boat(s) if possible. From there a discussion would have occurred as to the nature of the emergency. I just wonder at what point in that discussion the Mayday became a Pan-Pan? No way to know of course - but it would be an interesting transcript.
Smack, a Mayday does not become a Pan Pan. A Pan Pan can become a Mayday.
Regarding communications on one of the cases were a mayday was issued we know that only when the airplanes were circling the boat on crew member said to them that they were not needed and that they could sail safely to port.
One of the advantages of a rally is communications. On many boats there are some with satellite phones or long range radio and the ones that doesn't have them are able to relay messages through VHF radio. It seems that they did not use these means to the best use.