According to SPG's website:

What are blackout dates?

Some of our competitors black out certain hotels and resorts during peak travel times throughout the year, making it impossible to use reward points to book a room. As a Starwood Preferred Guest member, you’ll never encounter a blackout date for Free Night Awards at SPG Participating Hotels. Unlike our competitors, we don’t limit the number of standard rooms available for redemption. So, if we have a standard room available at an SPG Participating Hotel, and you have the Starpoints – it's yours.

Clearly SPG states that as long as a standard room, which in this case is the moderate double room for Suiran, is available, it should be bookable with points. SPG Lurker also mentions no negotiations as mentioned by you. Please correct me if my understanding with the SPG statement is wrong and what my mistake is.

Hyatt's system directly enforces the availability of point room if standard room is available through standard rate. The preperties are allowed to play the game of restricting the minimum required stay (like Andaz Maui) or rate plan (some Chinese properties do so for the Lunar New Year). However that's something clearly indicated by the rule. I do not see that in SPG's website and policy at all - otherwise what should we refer to when we are talking about the no blackout dates policy?