That only works if the points you want to use from each contract are enough to cover whole nights. If you want to use up 4 points you have left in one contract, that won't work since you cannot book a night with only 4 points.
It also doesn't work when you want to borrow points from one contract while you have current points available in another. Some MS CMs won't let you borrow points if you have other points available. That happened to me a few months ago and I had to resort to making a phony reservation to use up the points I wanted to protect. I really didn't like doing that (waste of my time, MS's time, waste of postage for the confirmation and cancellation letters for the phony reservation) but I couldn't get MS to do what I wanted.