Also, Babalu was coming off a loss to Jason Lambert, had been KO'd pretty quickly by Chuck in a title fight and was entering the swoon of his career. Palhares, though he did lose his last two fights at MW, was competing for the first time in a new weight class against an extremely underrated fighter who fought to razor thin - and controversial - decisions against former number 1 contender Koscheck and current number 1 Hendricks. It's all about context. Don't worry, he's gone if he drops his next fight.
Also, you've gotta love a guy who's basically like Melvin Guillard in reverse. He's the only guy I've ever seen with a submission attack that sudden.