The facts seem quite clear to me. Unless OP is lying, the bag was underneath his seat. It should not have been. It clearly did not belong to the passenger behind OP who noticed it, properly pointed it out to a FA who had it removed.
Hopefully WN / TSA / Airport police checked the bag for explosives before turning it over to L&F. There is no reason for WN to absorb the cost of rerouting the bag.
Good for the alert passenger and good for WN.