OUCH!
I don't have an answer that fits this, at this point - but let me walk you through what I'm seeing from the pics. (maybe someone else will be able to fit the pieces of this puzzle together)
Looking at those pics, I see that where the wall failed is where the cover was firmly attached to the deck. (eventually, the cover managed to come off the round ends of that oval pool - but didn't in the damaged area of the wall) This makes me think that the cover was equally secure on the other side - OR that any 'under the cover' air pillows had drifted to that side.
I assume that most of the cover was secured by a 'cord and winch'.
Furthermore, I assume you had weather like we've had - i.e. last week we got ~1' of snow dumped on us and then,this week, we've had the past 2 days in the 50s & 60s, resulting in a big melt off, with the result being that there was a good bit of water on the cover. (BTW- kudos to your friends for keeping the cover clean and debris free

)
This doesn't explain why the water on the cover became so heavy as to wreck the walls before being released. For this to happen, I suspect that a major hole/ tear in the liner just occurred. Somehow the pool lost a lot of water, in a short period of time, which resulted in the water on the cover being heavy enough to wreck the wall :x
If the other areas around the pool are ~ dry, look for a big puddle around the pool to see ~ where the liner failed.
Knowing where the liner failed is ~ useless now but, it may help them in the future. [This assumes that they will replace the pool]
I'm sorry this happened!
I hope you will continue with this thread and post more pics, as the reason for this wall failure unfolds.