Customer service is equally clueless to how eBay works this side of the year 2000, most CS staff (particularly the outsourced/overseas ones) simply follow scripted responses displayed on a screen without actually checking facts.
By the sounds of it, CS was just telling you that whenever a **Good 'Til Cancelled** listing relists, it will take one freebie off the 40, even though most of your listings are in fact auctions and that rule doesn't (or shouldn't) apply to you.
The only true limits that apply to sellers, are usually sales-based, such as the amount of items per month, or up to an arbitrary amount of money made per month. This restriction usually only applies to new sellers (or maybe "Below Standard" sellers as well) e.g. if they have a limit of only 10 items per month, it also includes sales, so they can't just go back and list things back up to 10 items if they sold something.
Right now I have well over 300 items listed in total and have not paid a cent in insertion fees in years. I use a mixture of multi-quantity or multi-variation GTC and auctions, so it only shows up as around 100 listings.
Auctions that relist automatically should not take anything off your 40 (contrary to what it says when you are listing something), but GTC listings will.
Lastly, for the readers, this particular topic is also way out of date, the fixed-price Buy It Now options were killed off and replaced with GTC early last year, and the automatic relist feature (now only applicable to auctions, including auctions with BIN) allows 8 relists instead of 3.
