If this is the case, than the problem has nothing to do with the fact that they are selling a device with this software in it. The problem is that GPL V2 requires that if you use software with GPL licensed code in your code, and you distribute that code, you must publish the source code to your code. Perfectly legal and within the license to sell a device with this software in it, as long as you publish the source code to your code. People who publish their code under the GPL don't like it when their software is stolen from the public by people who don't give back to the public.
There are two options for Viofo, remove the YAFFS code from their software and write their own implementation, or publish all of their source code that relies on YAFFS. There are no other options for Viofo.