>Enormous difference between having a margin account and trading on margin. A margin account simply means you're allowed to trade on margin, not that you have actually done so.
You're technically trading on margin when you open a new account and trade before your cash has cleared. This is most likely what happened.
Still, this is a horrible message to show a user who is in that situation and who did not place a sell order themselves (message wording from the article):
“We’ve received your order to sell [#] shares of [stock] at the best available price.”
This is poor communication from RH. A preventable own goal.
You're technically trading on margin when you open a new account and trade before your cash has cleared. This is most likely what happened.