Actually, I'd say it's much much worse iwth Preferred Hotels.

Within Choice's system, the reward reservations are done the same way as paid central reservations. A hotel cannot handle central paid reservations if they cannot handle reward reservations. The only time it's been a tiny bit touchy for me has been in Choice Scandinavia (which is actually in a parallel program called Chioce Club, not direclty in Choice Priveleges), but because they have Choice Club, every front desk agent understands at least the concept of an awards stay. But generally this only results in slight delays (until the right person, who comes in later, can look at my reservation).

But Preferred Hotels does not have a points program of its own! So chances are that many front desk clerks have no clue what a reward reservation is! At many Preferred properties, it's possible that most of the front desk clerks have never seen a guest registered for a rewards stay, it's that rare.

But if Preferred reservations through Choice work like Choice reservations through Choice (in that no credit card needs to be given at reservation time), I would recommend one simple change of procedure could insulate you somewhat: Don't hand over a credit card until you verify that it's for incidentals only and that they acknowledge that you room is paid for in points (or otherwise prepaid, in case that's how they see it).

That one slight change of procedure wouldn't have gotten the OP that hotel for the night, but also wouldn't gotten the scare of being charged $800+. It would have come down to a more common and simple case of "hotel can't find reservation" (which of course isn't great, but OTOH isn't as bad as what happened).

I mention all this because, once you factor this in, Choice does have a big advantage over some other programs, in particular Piorirty Club. When you book a room as a rewards night with Priority Club, there's hazy language saying that your credit card will be charged the going rate if you don't show up (but nowhere does it explain what the going rate is!). And that's exactly what happens: If for some reason you're no-show at Priority Club, your points aren't used, instead you're billed at the rack rate of the hotel, however high that may be! That's scary, you book a hotel which you can't afford on points because you can't afford it, and then if something happens, you just paid for what you can't afford!

I much prefer the Choice scenario, where if you don't show up at all, you simply lose the points, but owe not a single penny.

I thus am not sure that I see the wisdom of bailing on Choice Priveleges simply because Preferred reservations may not always work well (unless, of course, the only reason you participate in Choice Privieleges is to redeem at Preferred).

The grass always seems greener on the other side of the hill...

(I keep seeing this pattern. First people think that Choice has the worst expiration policy, only because they haven't heard about WyndhamRewards' expiration policy. Now people think that Choice rewards reservations are dangerous, whereas it's actually Priority Club reservations which are much more dangerous IMHO.)