I think you got this exactly right. The reaction of an uneducated manager here was probably “Wow this guy hacked our system by doing things he wasn’t supposed

I think you got this exactly right. The reaction of an uneducated manager here was probably “Wow this guy hacked our system by doing things he wasn’t supposed to do. You’re not allowed to transfer between cards. He broke the rules.” It’s not unlike the logic that says “We left our front door unlocked and someone walked in. How dare they.”