In a choice between thinking that a vending machine company put facial recognition technology into a vending machine or prankster students hacked the device to display a suspicious error message I would suspect the latter is the case.
However, watching the video and looking at the brochures on the manufacturer’s website, it looks like the manufacturer did indeed put rudimentary facial recognition in so they could gather demographic information on their customers like gender and approximate age for marketing purposes. Maybe the hole was damaged by curious students?