Could it have been a silk rug? Materials made of silk can react badly when wet. When I am cleaning what I believe to be a silk rug, I don't pre-spray the rug itself. I spray the pad instead, up to the point where I can hand-squeeze the excess cleaning solution out of it. Then I clean with the medium glider.
Could be. The standard liability policy for carpet cleaners, unlike a physician's malpractice policy, does not cover the floor covering you are working on. It covers other damage you might cause from your working on the premises.