A Lorcha: I had a carbon copy so it was indisputable that DCC was refused.
AFAIK server made no further input into the card terminal that I'm aware of so it probably was a fxcked terminal.
I was using a local HK bank's card and these banks are very compliance detail-oriented - once presented with a incontrovertible prima facie chargeback case the bank processed a full Reason Code 76 chargeback against the Macau acquirer.

I don't tip with card.
But I think conversion on the fly is very likely - the MOP tip is also converted at the DCC rate manually and a USD tip adjustment applied. Assuming the owner pockets the tip (this is why I leave tips in cash), this is the best way to maximise loot and the chances of keeping it.

The second alternative is maybe the DCC providers want to earn commission on the tip too! Perhaps the fxcked terminals allow for local currency tip adjustment, and will "helpfully" (to the merchant) convert the tip to USD at DCC rate