What happened, briefly and honestly
In 2016, a project called 'The DAO' (a specific early decentralized venture fund project, not the general concept of a DAO) raised a large amount of ETH from thousands of participants through a smart contract designed to let token holders collectively direct investments. An attacker found a flaw in the contract's withdrawal logic and used it to drain a large portion of the pooled funds into a separate contract they controlled. Defenders of a strict 'code is law' view argued the attacker had simply used the contract exactly as it was written, so the funds were legitimately theirs under the system's own rules. The Ethereum community disagreed strongly enough that it executed a hard fork, a coordinated change to the protocol's history, that effectively reversed the exploit and returned the funds to the original participants.
That fork is why Ethereum and Ethereum Classic exist as separate chains today, Ethereum Classic being the continuation of the original, unforked history where the exploit's outcome stood. The point of walking through this isn't to relitigate which side was right, reasonable people still disagree, it's that a community and its tooling were willing to override 'the code executed correctly' when the outcome was seen as unacceptable. That's a social and governance decision, not a legal ruling by a court, but it's a vivid illustration of the same underlying principle: deterministic execution doesn't settle the question of what outcome should stand.