but if your last extension was using the 800k method you have the meet the 800k/400k requirements as well before you get the new extension based on 65k deposits
This could be because you used this method before they changed their "rules" so you are allowed to continue using the pre-change method sometimes referred to as grandfathering.
You failed to meet the requirements of your current extension (i.e. maintain 800k for 3 months after approval then never go below 400k for the rest of the year) so you cannot get a new extension and will have to leave to start again with a new 90 day Non-O.
It doesn't have to be the same date every month and the sum can vary as long as it is always a minimum of 65k deposited. The IO was conning you to get a bung.
You will be going in with your documents to unfreeze your account, they are not closing it. Up to you if you wish to withdraw your funds and close the account.