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Sorry if this has been asked before, but I did search and couldn't find it.
If you break the rules you effectively 'lose' your heat.
Varnish/Pendleton were in the first qualifying heat, so they ended up last out of 8, which means they didn't progress.
The Chinese came last in their 'match' so to speak, which was for gold or silver. So they got silver.
They weren't disqualified, they were relegated to last in their race.
Same for both teams, the GB team came last in a race which meant they didnt qualify for the final, the china team came last in a race where last place got silver.
They both did.
EDIT: Sorry, beaten to it.
Yet again the Germans win on penalties.
Semantics Shirley. Their relegation meant they didn't qualify.
^ not really. It explains the OP's question.