Basically I won the WS in a league and received a $25 credit instead of 5,250 points. I contacted support and was given this answer: "When the season was purchased using a promo, the prize is $25 in credits instead of the Reward Points."

1) Is this common knowledge or listed on a help site anywhere or when using promo codes?
2) This seems unfair to me. So anytime I purchase a season for not full price, I accept the fact I will receive a lesser prize?

Unfortunately, the $25 is correct. If you go to players guide>>>prizes/incentives, it is written really, really small at the bottom.

Well I can't argue then, still seems unfair to me but it is explicitly stated in the useless player guide :).