How was my payment method automatically updated even though my expiration date had passed?

One of the things credit card companies provide is an Account Updater service. Account Updater is a generic term for programs such as Visa's Account Updater or MasterCard Automatic Billing Updater that are offered by the credit card networks to automatically update subscription customer card data when cardholder information changes, goes out of date, or is canceled and reissued based on a disputed charge. This is a completely normal part of day-to-day business and not fraud or illegal. You can Google the term "Account Updater" for more information on this.