Oricorio damage reduction issue

I had a ranked game a while back playing a Hisuian Zoroark deck against a Mew deck. They had a Oricorio on their bench and I understand that let's their Pokémon, as long as it's a Fusion Strike, reduces 20 damage from attacks. This shouldn't affect damage counters, poision, etc, Only attacks from my Pokémon.

I had a Radiant Alakazam and used it's ablity Painful Spoons (move up to 2 damage counters from one of theirs to another's opponent's Pokémon). I couldn't select their Meloetta when it was in the active so I moved damage counters from one of their benched to a Mew. The damage counters moved but then canceled out leaving both of the Pokémon damage free.

Later on in the match, I used the ability again with their Oricorio out on the bench still. Their Mew needed the 20 damage more for a KO and the same thing happened where I was able to move it but the damage counters disappear.

I have video of the issue if needed for more information. Thanks in advanced for any help!