That is the most likely
My understanding is that there is no standard ID format for DDs so it is possible that if the merchant used the same format every time, it could cause confusion. On the other hand, if the original DD was fully cancelled then my understanding is that there would be no problem, so it is possible that if the financial institution had kept some reference to the cancelled DD then it may get rejected.
As I say, this is a bit of speculation and I’m not aware that it is the case in general, so I trust it will not happen to you again (with us or anyone else)
With regard to the minimum amount for a DD, I don’t believe there would be any issue. If you have a variable DD set up, and it so happened that the amount was for £0.50 then it would not be an issue and this would be paid as normal.
The question I have is, what would a regular DD for <£1 be for?
I would imagine that small amounts like this are more likely set up as regular card payments instead rather than DD agreements, no?