The hotel should have given the OP one King suite at the rate he/she booked, at a bare minimum. Since the 2nd King suite was also available, offering that at the same rate as the first suite seems reasonable.

If the King suite was offered at the rate the OP booked, then it's technically not a "walk" - it's an issue of room type, which is a little different than a walk. Sofabeds suck but for one night it's better than no room at all.

But there is so much other stuff going on here that it's hard to know what really happened and how unreasonable the FDC was being.