It seems to me that there are at least two reasons why this would have happened.
1. The label was applied unprinted in error, and Cheltenham DO noticed and applied the PAID handstamp (though how did they know it was 2nd class and not 1st class?)
2. There was a fault with the Horizon printers at the counter and Cheltenham deliberately used this handstamp on them. That doesn't make much sense as if they couldn't print on the labels they should have used stamps!
Cheltenham Delivery Office is in Swindon Road; the main counter office is now located in WHSmith in the High Street. Is this associated with new staff, when the PO is relocated in the high street, rather than long-service Post Office employees?
Update: This wasn't a one-off, as a similar label dated 18 August was sold on eBay on 10 October for £27.75 - see below (click on the image for a larger one):
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