That's not what OP said. The conversion to a free account and then back is not related to the refusal to refund his money. They temporarily took away paid features, but only because they botched his cancellation/refund request. When he pointed out their confusion, they corrected it. He didn't get a refund because they have a no refund policy.
It was neglect for sure, but I think it stemmed from poor communication and not malice. He requested that they cancel his premium service and refund him for the remaining duration. They cancelled the premium service, but neglected to tell him that he wouldn't get a refund. Also, this was during a time when a lot of people were trying to cancel, so I'm sure the customer service team was overloaded with this type of request.