Cash witdraws from an underlying credit card without fee can be used for fabricate spending which violates most of the credit cards terms. You can make credit cards points by large cash withdraws which can then be deposit to another bank and used to pay back the amount of the credit card bill. I think Curve only discourages credit card cash withdraws, not debit card ones.
It’s easier to just pay a credit card with another credit card directly and generate points/cashback/whatever instead of going through all that. Here in Portugal no one has a problem with that, some credit cards are specifically tailored to pay your other cards with that card and then pay off the total debt from that card instead of paying each one
In the UK you typically cant “pay” a Credit card off with another Credit card without incurring some cost.
Not sure of the full reasons behind it, but you can “transfer” a balance - same result as “pay” - from one card to another. Typically a balance transfer will incur a fee. It is this fee that people try to get around.
Right now there are a few (3 I know of) cards that allow transfer with a 0% fee, most run with a fee of 1-3% for 18-30 months. So it’s that 1-3% “fee” they want to get away from. There are also others who want to earn rewards on cards, so non “cash” transactions can earn points/rewards. The whole topic of stoozing or reward farming comes to play with this.