Dogwatch,
That is not the case. The Regulation requires the airline to provide all affected passengers with a copy of their rights at the time the situation occurs. The regulation sets out a number of things the airline must do when a situation occurs and, in the case of denied boarding, that doesn't mean waiting until the customer formally complains and mentions the magic phrase.
Can I suggest that you forward the exchange of e-mails to the AUC (I provided the link in a previous post). This airline has breached the regulation in a number of ways and they should, at least, have their knuckles wrapped by the UK NEB!
Nothing in it for you to do so, but it may help the next passenger who finds themselves in a similar situation, and doesn't know the magic phrase.