I think you were very lucky. You could have easily ended up paying for two rooms.

What was the cancellation limit on the original booking?

From what you wrote I'd surmise that it was something like 4pm on the day of booking.

Not all hotels have that policy. I've just checked my spreadhseet and out of 6 points bookings only one has an on-the-day cancellation term. 4 have the day before and one has 2 days before.