I don't understand.
Hard Mode and Story mode do not share a lock-out. So, if you switched, that meant you started a new instance and had to kill T&Z again.
Which means the chest being red had nothing to do with the difficulty switch. More likely, you were just too slow and the chest locked.
I think what he means is that when they killed the Story Mode boss the chest never unlocked at all. If that's the case it wouldn't have had anything to do with a lockout.