They did set it up as a "direct" flight on purpose. IMO that was almost certainly an effort to drive sales by misleading customers. If UA is going to use this trick, then it should bear the consequences of that choice. The 10 minute connection is certainly unintentional, but that does not absolve UA of its responsibilities in this case. IMO that would be ensuring that a direct flight can actually be taken as such.

I can think of another explanation for making flights "direct": that it's to save flight numbers. A possible example would be the "direct" flights that are clearly not an attempt to mislead customers... the Express flights that return on the same number (e.g. ORD-MKE-ORD). The MEX-SFO-SEA might make sense if the direct flight was scheduled on the same aircraft (which it is not). UA could easily have UA820 be direct to the A320's normal destination after SFO.

The most logical "direct" flights are those that are inherently "direct" in the same way that 2V (Amtrak) is direct from ZWU-ZYP (Washington to New York). The Island Hopper is an excellent example.

I'm not the biggest fan of gov't regulation, but I would support a regulation/law that required airlines to ensure that all pax are able to stay on the "direct" flight (perhaps applying IDB rules to pax that cannot make the connection). US airlines use the "direct" nonsense to market their applications for rights to certain international routes, such as the China routes a few years ago (direct service from xxx to China with a change of gauge at yyy). If airlines sell this nonsense to the gov't as a service, then the airlines should have to live up to their sales pitches.