I think they are referred to as "fuzzies" throughout the article because that is their preferred nickname on this campus...I had never heard them called "Alpha Xi" or "AZD" before GC. (Though from a journalistic standpoint, the author should have said "Alpha Xi Delta".)
I have always really loved the Alpha Xi Deltas here, several of my friends are members and they are known as sweet, fun girls. I do think they should at least be put on social probation for this, but I have never heard of them being in trouble before. I would be so sad to see them go.
ETA- This champagne brunch is an annual event for their chapter. It usually starts around 10am and involves breakfast and champagne. I've never heard of such big trouble with it in past years though.