Hi guys, here are some answer to your questions. Sorry if they are imperfect, as this was quite a long time ago.
1) This data was imported by HOT. The data was provided by the geospatial agency of Indonesia, I don't remember the exact name of that organization.
2) I don't remember if it is documented on the import list. I would think so. For sure it is documented somewhere.
3) The data quality is not great. The idea when we imported these locale names was that a) most of Indonesia was empty on OSM at the time, b) the locales in this data set were complete, but not geographically precise, and c) they would be re-positioned to their correct coordinates by the community over time.

Jedrzej, I'm afraid I can't answer your question. The locale mappings to OSM were discussed with the Indonesian gov't agencies before the import, but I can't recall the details of that.

Yes, sorry, the change to North Caucasus Federal District (relation/389344) I made by mistake when correcting South Ossetia. I have reverted it. In the South Caucasus, admin_level=3 is used for disputed territories, see boundary=administrative