it is probably worse than you thought. it seems citi is also shutting down all of a person's account if the 2nd submission is also filled in wrongly. it sounds like af is not refunded and previously earned points are forfeited. a few DPs on reddit (link below) and more in uscardforum. i also know a few people whose cards are still locked. their SUBs are expiring and have not have the chance to use the credits, but citi still billed them for the AF, and they are not allowed to cancel the card to avoid paying it, so they get hit with late fees and a bad record on their credit report if they do not pay. really the worst

on the positive side, i havent seen any new sign ups get hit with the 4506c

Citi Closed all My accounts (Form 4506 C) : r/CreditCards
Citibank CSE 4506-C Review Follow Up Thread : r/CreditCards (see comments)