"Indignant and angry," ha. Internet, serious business, and all that jazz. I don't even have a piece I'm interested in submitting, so don't jump to conclusions. I'm just defending logic here.
Of course I'm saying that you should tell people right now that they have one day to finish their works. Here's why:
If you're going to ask what happens if they've been working on it since the deletion, then you ought to be asking, what happens if they've been working on it since long before the competition began, or if they merely submit an old work as a competition piece? In the creation of the current rules JamStunna and the others decided it was better to trust in participants, so why stop trusting them now? A day and a half can be a lot of time for a writer, after all, so who knows how many people had plans to submit before the deadline? Why deprive them of that chance because of a mishap?
Also, there's no reason that people who have already submitted couldn't resubmit their works as well. It would be their fault if they didn't, and just as much their fault if they hadn't been working on it since deletion as well (after all, a work is never finished, it is merely abandoned by the author). There's really no reason to protect them from what can only be their laziness or contentment and punish others for what may just as easily have been the fault of time availability or writer's block.