A property with a tax lien does not go to auction. The property tax lien holder is more senior to all other liens, except a federal tax lien. This includes being senior to mortgages, which is why mortgage companies typically keep your property taxes in escrow (to ensure they are paid).
Once a tax deed is issued, no compensation is paid to the previous owner. The title is not marketable for a period of 7 years. That is, a title company will not issue a warranted deed on a tax deed transfer. To resolve this, the deed holder needs to wait or bring a quiet title suit. The previous owner may get compensated in a quiet title action to sign a quit claim deed or similar to rectify the quiet title suit.
Truth is - property and property rights are largely a convention that we agree upon, that convention is how state/government is created.
Remember that there is only one sovereign in every single country on this planet - king, despot, president, parliament or the people. Individual sovereignty is practically non-existent.
You don't own the land or your body. We just agreed to protect each other's freedoms and grant certain protected rights.
The owner in the article had unpaid property taxes for over 3 years and apparently underpaid the amount due right before a deed sale because he miscalculated interest. It's hard to know exactly what happened from reading the article alone. A court judgement would state the facts of the case more clearly. If the miscalculation was the fault of the county, it seems like they were in error and the deed should be invalidated. If the county gave him a quote and he intentionally underpaid (for whatever reason he justified it with), I wouldn't expect him to have recourse under the law.
States are broadly divided into tax deed and tax lien states. Michigan is a tax deed state and I am not familiar with the particulars of their law. I live in a tax lien state (Colorado). When you don't pay your property taxes, a lien is sold at auction. If you don't pay after 3 years, the lien holder can apply for a tax deed. This process takes 6 months. The owner is attempted to be served and notices are published in the local newspaper. You need to contact the county for the payoff amount, but the interest in general on the lien accrues monthly computed on simple interest (non compounding). The rate this year is 12%, so 1% per month.
There needs to be a consequence for not paying your property taxes or few would pay them.