(1) the “reimbursement” for the full cost isn't all bona-fide reimbursement, since you are getting reimbursement for more than you paid after the discount, and therefore should be taxed like any other compensation from your employer, or

(2) The rewards you get in that case simply aren't discounts, and should be taxed as normal, but not employment compensation, income.

(These differ, because #1 has payroll tax implications that #2 does not, as well as the income tax implications.)

The fact that neither of these send to happen is either a legal loophole with no strong theory or just an administrative failure.

So there's a pile of points growing, which must be accounted for in the balance sheet, but which are essentially worthless to the company. And being a trustee is a legal hassle nobody wants to deal with if they can avoid it.

So the companies just hand those points and rewards over to the employee contractually, which dissolves the trust (since the employee now beneficially owns and legally owns the points). Much easier. And you can spin it as benevolent generosity to boot.

(Of course, I am not a lawyer.)

Making me take anything but United means no business class upgrade, making me take anything but Uber means im waiting way longer to be picked up from anywhere, making me not stay at SPG means no room upgrade or check-in/checkout perks.