I was in Vegas last weekend and spoke with someone at the Caesars Rewards desk.
I explained my situation and asked if there was anything they could do for me. The rep said no and explained that when Caesars receives a status match request they reach out to Wyndham who than must "approve" the match request before Caesars will honor it.
It sounded counterintuitive, as you note, but that is what the Caesars rep said.
A supervisor happened to overhear our conversation and she corroborated what the rep said.

So I have reached out to Wyndham and will report back.

I contacted Wyndham via the support page on my Wyndham Rewards account.
You have to pick a category for the inquiry and in the text box explain the issue.
Be sure to include your Caesars Total Rewards number. Your Wyndham Rewards number is automatically included in the email.

They responded within 12 hours and said they are taking a look at the issue.