We should not refund the bounty. It's perfectly fine to say you'd prefer mod answers in a question, and so it should be fine in a bounty as well. It's also worth noting that this is exactly the course of action we want users to take when your question already exists, but doesn't have answers which satisfy you. post a bounty asking for answers which meet your preferred criteria.
Additionally, the bounty poster doesn't have any other solution. He can't ask new question saying he prefers mods since then that would be a duplicate, so his only option left is to post that bounty. If we then say…