OP, it's included because you used that money and you haven't paid it yet. So, that's not a background, that's front and center.
As far as limit also being included in utilization calculation, CO no longer has a limit as most people would interpret word "limit".
It's closed, you cannot make additional charges, it's affecting your scores, you're further damaging them while disputing valid account status over verbiage.
If you pay it, it will stop affecting your utilization. If you chose to leave account unpaid, at least stop frivolous disputes.
The whole "duking out" is only going to hurt you, but you're free to continue untill the day CRA decides you've done too many frivolous disputes that they won't entertain it any longer.
Payment or settlement would work a lot better.
