I doubt they knew they were signing up to be exposed to real snuff films.
Personally, the upgrade in graphics has made Mortal Kombat uncomfortable at best and unwatchable at worst for me.
I believe we are all jumping to conclusions. Do we know its company policy for people to watch that stuff or is it the individuals doing so in order to get inspired. The person said they would walk by seeing people watching this stuff but that just might only be for people who need to do so because for some reason they believe it will help them with making the game.
It would be different if we read that people are being forced to watch such content in order to do their job and if they did not they would be fired or something along those lines.