their point is it could have been stored encrypted and then decrypted for the customer service person to read back to you. Access to plain text != storing it as plain text.
If the data can be read by so many people in the company that even the customer service people have access, it's functionally not encrypted.
> provably storing peoples' online banking logins in plaintext in some ancient mainframe database system
Is not about functional encryption but storing directly as plain text.