In the end it turned out well. I have no idea what was with the first supervisor I got and why he was so bothered by talking to me. He never did explain why I would not get those points nor why my travel purchase was ineligible. After the CS reps explained it many more times than was necessary I was very clear on Blue Sky not being eligible.

My confusion began due to a glitch on the card website that started many months ago. I wish I had a screenshot of it, but for at least 6 months the rewards tab on my card page showed that I had Membership Rewards Express points and not Blue Sky Rewards. This was obviously a mistake that I did not understand. It happened when AMEX introduced the gift card redemption to blue sky some months ago. It was only yesterday when I started complaining that the glitch was fixed.

I am still unsure as to what happened with the confusion on the travel purchase. I booked directly with Amex travel and asked repeatedly about the 2x rewards which the CS assured me I would get. I think they were also confused and did not realize I don't get MR points.

Another, much politer, CSR called me back and said he was sorry for the confusion and credited me 1500 MR points to make up for it.

Lesson learned here is simply that Blue Sky card seems to be a joke. Thank you for helping me figure out what was going on here as well