I agree completely with your last paragraph.

As far as someone refusing to believe they've crossed a line, that's very dependent on their expectations about people's boundaries in general, and yours in particular. They may be used to people who have completely different boundaries, and who genuinely only react to some line-crossing behavior when they are having a bad day. And a lot of the time, when people have a bad day, they aren't good at realizing that: in my experience, most people are horrible at knowing what they're really upset about, and at telling when their boundaries shift due to their mood.