For anyone interested, I've DMed the club on Twitter regards Matchday membership already being renewed and they are refunding this.
I am so grateful to those that liaised with the club around the introduction of these. So relieved not to have the stress (and expense!) of all 19 matches going on sale at once.
I imagine that the 600 that went on sale are very likely STs that weren't renewed so the overall proportion of ST holders hasn't increased but the club could easily have turned those into matchday tickets as they did last year which makes them more revenue (in more ways than one if a tourist gets hold of them).
The criteria also works from the clubs POV as not only can these tickets not be transferred, those keen on purchasing a ST in future now know they need to be buying tickets directly from club to meet criteria. Less existing STs being shared between friends and family = more on the exchange for City to sell on for more money!