A few years ago, I tried to open a bank account, and was turned away because my visa stamp expired (despite having valid immigration status). The clueless clerk and her advisor were going through The Patriot Act to find justification.
Fortunately, other banks weren't staffed with idiots, and I was able to open an account elsewhere after providing my documents.
Possibly, but this not unreasonable for regular employees. They are not paid enough to deal with the consequences of making a mistake in a low volume situation.
If they go off-piste, even when that is a valid action, then they are likely going to be penalized by their employer's compliance department. That's because that piece of bureaucracy is still required at the next stage of bureaucracy. Now level 2's life is harder. It's best just to ignore and move on. There will always be some non-zero failure rate like this as long as bureaucracies exist.
I say you dodged a bullet, then. They are probably just as clueless handling everything else.