The springs had rusted through, and inner pipe slid out of the outer pipe. The poor boy's bike was a Nishiki Reno 26, but these dangerous forks can be found in many other bikes too. Apparently there are thousands of these alone in Finland. The manufacturer is Taiwanese Dah Ken and the model was RST 281R. (source hs.fi). There's an unverified hearsay that the poor guy had just taken the bike to a professional maintenance.
The road traffic safety department in Finland is considering of pulling these forks out of markets. Guys, be aware of what you buy! Of course we tend to think that products on the market are safe, but sometimes not all aspects can be thought of by the authorities.
My solution to keep the risks and costs down is to buy things that have few moving parts and therefore don't brake easily. It's stupid, but I don't even have a vacuum cleaner (I've had some bad luck with them). In stead I use wipes. The same goes with bikes too, although they are not exactly space technology. My bike is single-geared and has fixed front fork. Nothing moves that doesn't absolutely have to.
Anyways, if you have similar fork to the one in the picture, check its condition!