I've done this even when I had several days booked together on points. It's easier IMHO to reprice the whole booking and get those points back than if each night were booked individually and the price dropped on a few them and then you need to do each booking separately to get points back on each one.

What I don't like mainly about having separate reservations is that no matter if I tell the hotel in advance as well as at check in to link the reservations and although they do always let me stay in the same room and I tell them to make sure the keys keep working throughout, nevertheless the keys are always deactivated at the end of each reservation and I have to go through the hassle of (sometimes) waiting on long lines to get them reactivated.