I'm puzzled as well. What kind of MS activity OP did? He deposited money, he withdrew them. I am failed to see what he did wrong.
Sure, not classic "MSing" in our sense.
However, read his post again. He was using CS to cash out not insubstantial ($10K) rewards in an account that had no assets ($100) and then moving the cash out of that account as soon as he accomplished his intended goal of monetizing the MRs.. Now he is in a pickle because he lost a conduit for cashing out MRs. (So think of a comparison, substitute VGC for MR and then me trying to use CS to cash out my Simon VGCs, if that were possible.)
CS correctly saw that this was a very non-profitable customer in both the security and expense side of the equation and dumped him. I suggested that after a period of time reestablishing a relationship with a local CS center and then not doing what got him shut down in the first place (at least lower the volume and velocity and keep the money in CS)..
Remember, his question was whether he was banned for life. In essence, I said no with a qualification.