Avira > Because they tolerate
It looks like your view of the community is more of a sect that upholds high standards. What do you do with the rest of the community? Put everyone in cherem. With all enthusiasm for movements and uniformity, we forget that there are real people out there who are traditional/Masorti who are part of the Jewish community. You see this more in Sephardic circles that did not experience haskala and subdivisions by shades of observance.
If someone is even openly violating shabbat – you do not call him to read Torah, but you do let him into the shul (otherwise, the question of kibud will not arise). With chabad, it is claimed here simply that they are transferring from a monolithic movement to a general community. Whether this is so or whether this is a good or bad, I do not know. But it is a normal thing to have, and hopefully there will be leadership to deal with issues. If “rebbe” title is verbotten, use “gaon” or “rebbe’s talmid”.