Its definitely poor customer service. If you accidentally give a customer something, you should never take it away. I agree with not crediting the new stay because it shouldn't qualify.

I had an issue in January where I tried to pay for a Points+Cash stay with gift card, and the +Cash portion never went to the hotel. Problem was, once they applied the gift card to my account, they couldnt figure out how to take it off. Without me knowing, they added a 4th night to my reservation, charged $50 to my gift card (the balance of it) for the 4th night (much better than my $300 +Cash portion). I was happy with this resolution since I saved $250.

Did I stay this 4th night, no. Would definitely be annoyed if they took it away now though. In addition, I was target for the promotion of stay 1 cash night and get 1 35k FNA. I didn't technically qualify for the night or the award, but once issued they better not take it away.

As it stands though, I am more than happy to have saved $250, get an extra night credited and get a FNA.