The big victim was Kamui Kobayashi, whose last-lap pass on Jules Bianchi was stricken entirely from the record.
"I was thinking 'am I seeing things?' said winner Lewis Hamilton, recalling the early chequer.
Mercedes chairman Lauda couldn't resist a dig at Ferrari.
"We had discussions in Bahrain and the red team wanted the races to be shorter," he grinned on German television RTL. "So this was the test," Lauda joked.
More seriously, the great Austrian added: "It's ridiculous and shouldn't have happened. The Chinese people should know how to count the laps properly."
It was among the only minor glitches in Lewis Hamilton's first-ever F1 hat-trick, as his tally of 25 victories drew even with the great Lauda's.
Lauda said the Briton is on course for his second world title in 2014.
"The only thing he has perhaps sometimes neglected in the past was the full focus," Lauda said in Shanghai.
"He was bringing the dogs to the track, he had a whole entourage of people. When the dogs were there I told him to just focus on himself, drop the baggage and concentrate 120 per cent.
"Now he is doing the performance you expect from him. If he had not failed in Melbourne, he probably could have won there as well," Lauda added.
Melbourne was, of course, won by Hamilton's teammate Nico Rosberg, who still leads the world championship by a few points.
"There is still a lot of races to go," said former F1 driver turned commentator Patrick Tambay.
"With the equal status at Mercedes, Nico has shown to be lacking a little bit compared to Hamilton, but the season is long," he told France's RMC.
"Before, we saw this very jovial, very smiling Nico, but now it feels a little more tense," Tambay noted.
The circus now breaks for three weeks before re-emerging in Europe for the Spanish grand prix.
"Barcelona is a good guide (to form)," Lauda said. "It has a bit of everything.
"All the teams will bring updates. When you have opponents like Alonso, and Red Bull as well, you cannot sit back. Adrian Newey was not here, he was sitting determined at home, working hard to catch up," he concluded.