I doubt PG is hastily rewriting all of YC's investment agreements as we speak to resolve this loophole!
This very much depends on the contract that was signed between the company and YC. Most likely, the founder has a fiduciary duty to represent the stakeholders' financial interests. By maliciously diluting their equity, this would breach the contract, opening up the founder to lawsuits.
A very relevant case is that of Eduardo Saverin's equity in Facebook getting diluted [0].
This very much depends on the contract that was signed between the company and YC. Most likely, the founder has a fiduciary duty to represent the stakeholders' financial interests. By maliciously diluting their equity, this would breach the contract, opening up the founder to lawsuits.
A very relevant case is that of Eduardo Saverin's equity in Facebook getting diluted [0].
[0]: https://en.wikipedia.org/wiki/Eduardo_Saverin#Career