In 20 years of staying in Starwood and Marriott hotels (plus other brands) no chain has ever cared the slightest bit about the method of payment when it came to loyalty credit.

This clause might be in the T&C to give them the power to shut down a case of abuse if there is any funny business going on like someone frequently check-in in people at a local hotel and giving them problems. I do that often but always tell my friends to be discreet and if there is really a problem to contact me first as the room is in my name.