What is really seems like is they were caught off guard with the NWO stuff being so hot, tried to change their product, but already had a bunch of stuff planned out for months in advance that they couldn't scrap. Taping a whole month of shows in one night made it impossible for them to change anything up. It led to things like them talking about Warrior being suspended indefinitely and removed from the upcoming PPV while he's wrestling on Raw, or Ahmed having his kidney injury that was to keep him out of action for weeks, but wrestling on the very next Raw with no problems.
And if I had to guess, I'd imagine there was some shake up with the booking team around this time and the power struggle was evident on screen by edgy, more hard nosed stuff being sandwiched by pure 80s garbage like TL Hopper, hillbillies, the Goon, and so forth.
This JR angle feels extremely Russo, but I don't know if he was actually on the booking team yet. You have Jake talking about abusing coke and hookers one week, a wrestling plumber the next, and JR calling Vince out as the owner who fired him because of his face the week after that.
Well, yeah, I don't think a real riot would be a good thing, but to have crowds that genuinely want to see the heel get his ass beat because he made them so mad they forgot it was faked for a bit isn't a bad thing.