I'm getting the same error for a booking in Switzerland. Using a free night certificate + 3,000 points leads to "An unexpected error has occurred. This service is temporarily unavailable. But don't worry, we're on it. Please try again later." Hope they're actually on it. Would be unfortunate to see the point rate increase, even though I have more than enough points in the account. The free night certificate, however, is going to expire shortly after that planned stay.

Edit: Instead of trying to modify the existing reservation, I canceled it and booked the same stay again. This time, it went through -- certificate redeemed and points deducted.