Could you have taken your money via the preloaded card option Happy? Or was the only option the cheque? I would have taken the card (if I could), and hightailed it to the nearest ATM machine.
In any event, I'm sure the cheque will clear just fine. If WU had flagged the transaction in the system, I'm almost positive you wouldn't have been able to pick up the money in any form.
As to WU confiscating the funds, I believe that after a certain time, any transfers not picked up by the receiver, get returned to sender. It's happened to me before when WU stopped allowing any transactions to Antigua for a time. I had sent through a shitload of them to Grand Prive (this was a long time ago), and months later I got a call from WU to go to my nearest agent and retrieve the funds as they had been denied. I then got cheques in the mail for the fees that were involved. And the cheques all cleared just fine. I'm pretty sure that WU was well aware they were gambling funds, which was the whole reason that all transactions were denied in the first place. Had they started questioning me, I would have told them to kiss my ass. But then again, I've always been a bit of a rebel.