While it is unknown if anyone actually abused the bug Google has disabled the ability to remove any URL in Webmaster Tools even legitimate ones until it can get the issue fixed.
The problem was signaled by James Breckenridge who discovered that by manipulating a Webmaster Tools URL he could trick the tool into removing content from any website or subdomain not only from the ones he owned as is the intended behavior.
"I settled on quickly making myself a chrome extension that adds a link next to a result in a Google search deep linked into webmaster tools. With that installed I was busy clicking away removing the URL’s in record time" Breckenridge explained how he stumbled upon the issue.
"Then I made a little mistake and accidentally removed a URL of a website I have no relation to I was stunned it could be that easy" he added.
Google was notified of the issue and is now working on a fix. In the meantime though the feature has been ompletely disabled.
"We’re still investigating this report and to be cautious we disabled all URL removals earlier this morning " Google told Search Engine Land.
Here's how the loophole worked if you're curious. All you had to do is manually edit this URL:
Replace YOUR_URL with the URL of a site you have added to Webmaster Tools and URL_TO_BLOCK with any URL out there even if you have no relation to it and that was it.
Surprisingly this worked and Google would confirm that it has removed the URL you chose from its index. Google is working on a fix but the issue could have been exploited all the while the loophole was active leading to some very nasty problems for targeted websites.