Yes, it was clearly the local office's fault for not entering it into their system that you weren't supposed to get a rental fee...
Except that obviously wasn't the problem, because they did put it into the system, which is why you didn't get charged for the first month. I had similar problems with Time Warner Cable when I bought my own modem. Every once in a while, the fee would get tacked back on and I'd have to call in and complain to get the charge removed. This only makes sense if they have someone or something going through records periodically, adding the fee back on without regard to whether the fee was supposed to be charged.
What was even more frustrating about my experience was, whenever I called for support because my connection was down, they would somehow insist that I needed a TWC modem. Once, they insisted that I couldn't have Internet because I didn't have a modem. A few times they said that they couldn't support me because I didn't have a modem owned by TWC, and they offered to send me out a new one. Once, they told me that outage was because the modem I had was not an approved model, even though it was the exact model they had recommended.
Maybe it's just bad training, but that's not really an excuse.