Not sure where you got your info from but you are wrong on what they can and can't do. Section 7.2 of the MSPOS reads:
Compliance with Terms and Conditions. All rules and regulations which apply to the use of
DVC Resort Vacation Homes and related facilities by Club Members shall also apply to any users of such Vacation Homes and related facilities arranged through the DVC Reservation Component, including a Club Member’s lessee, guest, invitee, licensee, or exchanger. By use of the DVC Reservation Component, each Club Member agrees, and each Club Member’s lessee, guest, invitee, licensee, or exchanger is deemed to agree, to comply with the terms and conditions described in this Disclosure Document and with the rules, regulations, and restrictions of any DVC Resort at which the Club Member reserves Vacation Homes. F
ailure of a Club Member,or the failure of a Club Member’s lessee, guest, invitee, licensee, or exchanger to comply with the terms and conditions of this Disclosure Document or with the rules, regulations, and restrictions of any DVC Resort may result in t
he denial of the right of the Club Member to reserve and the right of a Club Member or the Club Member’s lessee, guest, invitee, licensee, or exchanger to check in or use the Vacation Homes and facilities of a DVC Resort or for the Club Member to participate in the DVC Reservation Component by requesting a reservation for accommodations at other DVC Resorts until such time as the Club Member or the Club Member’s lessee, guest, invitee, licensee, or exchanger is in compliance. Further, failure of a Club Member, or the failure of a Club Member’s lessee, guest, invitee, licensee, or exchanger, to comply with this Disclosure Document or with the rules, regulations, and restrictions of any DVC Resort when such Club Member or Club Member’s lessee, guest, invitee, licensee, or exchanger is in residence in the DVC Resort may result in the imposition of penalties or costs or removal from the DVC Resort.
They have broad powers to both prevent you of making reservations and prevent you from checking in if your actions violate the T&C.