The company doesn't know what they are talking about. You are perfectly legal working for a foreign company inside Thailand as long as your work has no direct interaction/services with Thai businesses, persons, entities. The DTV was designed to fill that gap of qualifying remote, freelance, workcation, activities inside Thailand. Part B is you need a non B visa to get a work permit, and if they can't supply the visa paperwork they certainly can't supply the work permit paperwork.
possibly I mistook Tod's advice that it's a good idea to top up in case the monthly method fails, you wouldn't be at square one. I also thought you had to fulfill the 800k method which meant top up 2 months before applying. Confuffled.
if you're trying to switch over to the monthly income method, you still need to top up the 400K to 800K two months before applying for the next extension, during the time you are making the 65+k deposits