The chip has been safe to eat for millions of people for years.
Capsaicin consumed orally isn’t fatal. This kid probably has some other underlying health problems he was simply not aware of, but it’s not like it’s an inherently lethal product. If a kid with an unknown peanut allergy eats and dies from a Snickers, it’s not like Snickers are actually a lethal food.
It does say it’s intended for adults only, but that’s hardly ever stopped teenagers from doing anything ever. It’s probably good they pulled it temporarily, but the real answer here is probably simply “Don’t sell this to minors.”