Sometimes management thinks they lose money by taking a points reservation during busy times and will cancel because they also know of Choice's poor customer service. Some are already unhappy with Choice so they're not really concerned about alienating turned-away guests.
What most DON'T know, is that they actually receive 100% room rate for a points stay when the property is completely sold out, whereas a less than full hotel gets them peanuts by comparison.
On a semi-related note, if you have to cancel a points reservation at a Bluegreen property you MUST CALL Choice reservations! Don't bother clicking "Cancel This Reservation" on the website, as the points will not be returned to your account. Learned this the hard way; still waiting for resolution after nearly 3 months.