Re: Can we get rid of this myth
While I agree with you at the high level concept as an end result, the reality and legality is also different.
Banks view transactions against accounts as legitimate customer activity until proven otherwise. So in this instance Tesco Bank considered the customer had withdrawn their loan and reduced the balance on the account as appropriate. The customer had effectively lost their money without the bank going broke and being able to claim from the Financial Services Compensation Scheme. The customer then potentially failed to meet other payment obligations they had. While it might all work out in the end, it certainly isn't as simple as your analogy.
Not having a go at Tesco Bank on this one, this is how all banks in the UK work.