If I was a teacher, I think that's how I would react. The next punishment would be handwritten though, or something else, you only get one shot with that trick.
I admit that in the early 80s, most teachers were not very savvy with computers, so it is possible that he really believed your brother typed it all. But also keep in mind that teachers are pretty good at smelling bullshit, and it is pretty obvious that when pupils do things in an unusual way, it is not to make it harder on themselves, so he probably knew that there was some trick and just let it pass. I mean, these are just lines, nothing worth persecuting clever kids for.