Scrape, Sell, and Shutup is what he should have done.
Changing the name from "Steve" to "Joanne" isn't that hard. This wasn't a fancy multi-tiered wedding cake made into the shape of your favorite dinosaur, it was a generic cake with some icing on it. I've seen DQ scrape names off cakes tonnes of times, cake is good as new after.
As mentioned, he essentially out-dicked you with all the calls, thus putting you back into the right.
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