Originally Posted by
FlyingFreeYupie
Any airline would still need to abide by EC261 as far as when they cancel the ticket.
No. You are wrong there. Cancellation clauses in EC261 refer to flight cancellation: it's your ticket that has been cancelled. And that happened because the airline believes it's clear you didn't operate in good faith.
TAP, if it acts in the way we are discussing, simply withdraws from the contract it has with you by cancelling your ticket. You would need to take it from there with some form of adjudication through the courts. Or appeal to your regulatory authority.
It would be hard to convince a court you didn't understand this fare was not a kosher fare. So, it's very unlikely you would win in court, and unlikely the regulator would find merit in the case.
In short, best to save yourself time, energy and money: accept the refund, get back what you paid. That way you finish up where you started, no losses.