Bogut was mugging Howard before he retaliated, and because the refs failed to call a foul on Bogut, which they should have, they only gave Howard a Flagrant 1 to compensate -- at least that's the only thing that makes sense to me, because it was an obvious flagrant 2.
Doesn't matter what Bogut was doing. Howard is still responsible for his actions. One can argue that Bogut may have needed more fouls called on him.
As for the compensating, I believe that happens a lot with foul calls in the NBA and it is absolutely idiotic. Let's make another bad call to compensate for the earlier bad call! SMH