The writers were not messed up on this one, it was intentional. They wanted us to see that the game blatantly did not function properly. Locke should have noticed it too, but he was too entranced by it all to think about it. I believe it was a time based program. The chess program was known by the hatch residents not to be a real game, but a prompt for a self destruct mode. The programmers/residents of hatch did not play the game because they knew it was not real. Once it began to be played, a count down began in the program. After so much time of being played it would offer the phoney checkmates and then the prompts.
This would give the captive residents time to reclaim the hatch before the self destruct mode kicked in. I do not believe that there was someone watching them on camera and then detonated at the right time. This program was designed in case there was no one around to stop the hatch from being taken. Self sufficient, no human necessary.