Seems I misunderstood how the cutover to 5% happens. The wiki makes it seem that after the initial $6500, the 1%/5% kicks in.
Unfortunately it's not that simple. They calculate over the entire statement period in their favor. My initial $6k was done first (should've been .5%) and then started purchases in everyday category (should've been 5%). When they did rewards calculations, they did all the everyday purchases first at 1% to meet the $6.5k (done late in the statement period) and then what I thought was going to be .5% at 1%.
Was a costly misunderstanding. Next time the first $6.5k is going on it own statement.