My first thought based on the description of the chain of events is that a clamp or drain cock was left loose and the car ran out of coolant. I also agree with ok4450’s assessment of the service advisor. Most of these guys were at one time star used car salesmen who were moved to the service counter to move fluid flushes. If your heat stopped working, it was probably because you ran sufficiently low on coolant to have emptied the heater core. The bit about a safety device shutting off the heat in the event of an overheating condition does not make sense and is contrary to conventional wisdom to turn on the heater full blast if your car is overheating since doing so will draw heat out of the engine. This, of course, does not apply to air cooled engines, which your Subaru does not have, and I will stand corrected if someone else brings to my attention some way in which the heating and cooling system on a Subaru is different from other vehicles and running the heat while the car is overheating will in fact damage the engine.