I agree with you, Blizzard was definitely vague about the prize pool and the way the money from the sales would be used. The main ambiguous parts I'll highlight.
Saying that 25% of the proceeds is "contributing" means that there is already a prize pool that is being added to.25% of the proceeds will contribute toward the year’s finals LAN event prize pool
Insinuating that $500k is set in stone, before "contributing" sales.guaranteed minimum
Implying that purchasers are adding to the "guaranteed minimum" prize pool making it bigger.prize pool to the next level.
It was definitely a scummy ploy by whoever approved this. But in their defense, they never say Blizz is contributing to the prize pool at all. It's as close to false advertising as you can get, without likely it going through in court against you.