Totaled the car *after* repairs were already made; is this insurance company incompetent or is someone engaged in a scam?

The basic scenario and question

My car was "totaled" by my insurance company, but they did so only after repairs were made. They wound up paying the body shop for the repairs, as well as paying us their salvage value for the car. Both payments were significantly above the value of the car, so of course the combined payment was well above the value of the car.

This is in the State of Washington. The insurance company is under no obligation to total a car. The law simply provides for them to do so at their option under certain circumstances.

I cannot figure out why the insurance company did this. Is there a way that someone involved in this, either at the insurance company or the body shop, or perhaps both in collusion, managed to illicitly make money from this situation? Or is the insurance company simply not managing their claims correctly?

More details

• The car’s blue book value was about $6000 (to be clear: both Kelly Blue Book and Edmunds gave this value for a car in good condition; i.e. this value does not take into account the damage that existed)
• The cost of the repairs was about $7000
• The salvage value paid to me was about $9000 (the difference between this and the blue book value relates to how the policy is actually written, which in theory would help reduce the likelihood of totaling the car)
• The car was repaired and, as near as I could tell, to a high level of quality/competence (i.e. so it’s not like there was a fake invoice for the body shop repairs…they really did do the work).
• The car actually had almost $14,000 worth of work done at the body shop; this all started because it had been rear-ended by another driver, with that driver’s insurance company paying for those repairs. Prior to that collision, the car had damage caused by heavy snow falling from a building’s roof onto it, which I had not planned to fix, but then decided since it was at the body shop anyway, I would go ahead and file a claim for that under my own policy. I assume that the rear-end damage is not relevant at all to my question, as the payment for that was entirely from the other insurance company, but I mention it just in case my assumption is wrong.

The car was a battery-electric vehicle (Nissan LEAF). Blue book was relatively low in part because that model/year suffers from short-lived batteries, and indeed I was looking at the possibility of having to spend another $8000 (or more) to replace the battery if I was going to keep using the car.

From my perspective, I’m ahead at least $17000, between the salvage payment and the cost of the battery I no longer have to purchase. Money I can now spend toward a replacement vehicle that will work much better for me than that car.

But it seems to me that the insurance company has paid out $9000 more than they needed to. They were under no obligation to total the car and could have simply paid for the repairs and let me keep the car. Their net cost now is at best around $10,000 (their total payments of $16,000, less the $6000 value of the car). And of course, since the car’s title now is denoted as "salvage", it’s unlikely they could even get the blue book value of $6000 for the car, so that figure is optimistic for them.

That means their net cost was at least $3000 more than it should/could have been (i.e. as compared to just paying for the repair), and probably significantly more than that. That alone argues against the insurance company choosing that outcome.

But beyond that, how does someone at the body shop and/or the insurance company itself wind up making extra money on the deal? The insurance company is already down the $3000 compared to what they could have done. Is someone scamming the insurance company by somehow invoking the salvage/total process and then skimming even more money off the already-imbalanced accounting? If so, where did that extra money come from? Did they misrepresent the costs to the insurance company, such that the insurance company wound up paying out even more money than I’m aware of?

Naturally, I understand that this community can’t know what actually happened at the insurance company and/or the body shop. I am asking to find out whether there is a well-known, well-understood scam that causes this sort of non-intuitive outcome to occur.

Obviously it’s always possible regardless that the insurance company is just behaving incompetently. I’m wondering though if there’s an alternative explanation that at least rationalizes the outcome.