Footnote 4 of section 204.2 states that an account that authorizes withdrawals or transfers in excess of the permitted number is a transaction account regardless of whether the authorized number of transactions is actually made.
So, if our banking systems does not stop customers from making the excess withdrawls it is considered a transaction account and not a Savings Deposit Account???? I'm confused because the Reg gives you the option of preventing withdrawals over the limit of 6 or monitoring excessive transactions as a means for ensuring that only the number of permitted transactions occur.

"Authorizing" and "preventing or monitoring" are two different things.