As I understand it, your SIM contains identification information that basically uniquely tells the phone network who you are and what carrier you are associated with. When you let your cellphone account lapse (regardless of carrier), the identification information on your phone’s SIM card no longer points to a valid account.
Given the number of cell phones that are retired every year, it doesn’t surprise me at all that a particular carrier wouldn’t retain the relevant information on a lapsed account over a period of multiple years just in case someone attempts to reactivate a phone that old.
I suspect that whomever was on the other side of the line simply didn’t know that you can still call 911 with that cell phone (and he/she really should have).