Has the op responded to this query, looks like the ticket may not have been valid without the paper record card according to Chiltern. Clearly Oxford is in the Chiltern Network, but that is may not be the issue?
Going back to the original post - did the op present their paper record card in regards to the oyster card to the staff on the gateline?
This is stated in the terms and conditions of the Chiltern Railways season ticket deal -
"If your Season Ticket is on an Oyster card you must also have your paper record card to travel free at weekends and Bank Holidays. This offer does not apply on Christmas Day and Boxing Day."
https://www.chilternrailways.co.uk/new-customers
As for staff not knowing whats going on, who knows that Chiltern have actually briefed GWR staff on this offer?