Why did TIME MACHINE withdraw from an account with a 0% priority limit?

A priority limit controls one stage of cash-flow balancing. It is not a universal prohibition on every transaction involving that account.

Mandatory RRIF/LIF withdrawals and your automatic withdrawal instructions are calculated separately. In an ordinary run, TIME MACHINE can also relax a withdrawal-priority limit as a last resort to resolve a deficit; the year report warns when this happens.

Open the affected year and check required withdrawals, automatic entries, taxes and deficit warnings. A withdrawal may be needed even before retirement if the entered income does not cover spending and other commitments.

For the accounts it covers, the Withdrawal Optimizer uses its own retirement instructions instead of the ordinary priorities. Automatic deposits funded by Other still continue. The optimizer also retains a specific restriction on deposits to accounts whose deposit-priority limit is zero.