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Of course Bavasi understands Pythag. I don't think that was ever the issue. The question at the time was the extent to which Bavasi believed Pythag.
After the 2007 season Bavasi believed that the Mariners had outperformed it's Pythag record because of the character of the players; he believed that he had assembled a roster of players who did the right things, who knew how to perform under pressure in clutch situations, who played hard, and who had good personal character. Bavasi downplayed the Pythag record because he held that players with good character would produce more wins than could be accounted for with measures such as Pythag. In Bavasi's mind the fact that Jose Vidro was a crummy DH was offset by Vidro's clubhouse presence and veteran knowledge. Raul Ibañez's superb personal character, professionalism, and dedication to maintaining his skills would more than compensate for the drain associated with stationing one of the least mobile outfielders in baseball in one of the most expansive left fields in baseball behind a pitch-to-contact pitching staff.
Bavasi was wrong. And the central criticism of Bavasi is not that he didn't understand Pythag, but that he mistook luck for intelligence.
Further, based on Bavasi's comments earlier this year looking back on the Bedard trade it appears that Bavasi has not changed his views. Bavasi's self-critique of the Bedard trade was, in essence, that he hadn't sufficiently weighed that Bedard had never had to perform under pennant pressure while in Baltimore. The implication, of course, is that Bedard wilted when asked to be an ace starter on a serious contender and that if Bedard had possessed proper character the trade would have worked out fine.