This isn't particularly surprising - several large "real money" investors (pensions and the like) have had this sort of relationship with the Treasury. It enabled them to directly place bids on Treasury issuance without going through Primary broker-dealers (Wall Street). They were called "Directs" and would bid through the "TreasuryDirect" system.

Basically enabled the largest investors in USG securities to bypass the "commissions" other investors would pay to Wall Street firms.

I'm guessing that for some reason foreign accounts such as governments and sovereign funds had not been given access to this system for some reason, and after a point, the Chinese government investment funds (which are some of the largest in the world both in terms of funds managed and funds committed to the US) laid bare the inconsistency that they'd been disallowed this, simply on the grounds of being foreign.

Otherwise unremarkable.