belle3 - just adding to DebbieB's explanation:
You can do what you want to do because you are making the reservation at a non-home resort at the 7 month window. That is the same time other members who don't own at that resort can make reservations. All have the same chance at availability.
The problem with Geyser Gazer's example is that the original reservation would be made with home resort points (to take advantage of the 11 month reservation window). If MS just substituted non-home points for the same reservation, it wouldn't be fair to other members.
For one thing, it would mean than non-ownerws of that resort would never even have a chance at that reservation even though non-home points were used to make it. For another, any owner of that resort who happened to be on the waitlist for that time (and thus should have priority until 7 months ahead of time) would not have any chance at it ahead of someone using non-home points. It would be giving someone using non-home points a priority over an owner. That's not right.
So the only way you can legally "substitute" non-home points for home points for the same reservation is if there is still availability. As already posted by others, MS would actually be cancelling the original reservation and making another reservation. Anyone on the waitlist would get the room before you would.
HTH explain why the two situations are different.