Hi excommunicate,
I'm so sorry you are going through this. It certainly would not be possible at my uni for minor corrections to be changed to major corrections, let alone to an MPhil award. Whether it's possible at yours depends on the specific regulations, but it sounds inherently strange and not-ok to me. Have you spoken to anyone at your student union? It sounds to me like you will certainly have grounds to appeal any bad outcome, here, given the inconsistent messages that you have received and it will be helpful to have a student union representative advising you at that stage. Right now, I would focus mainly on getting the corrections done and maximising my chances of the PhD rather than thinking too much about things that could go wrong later down the line. You can get your ducks in a row for the appeal if they try to change the rules on you again, which hopefully wouldn't happen. But I do still suggest taking this specific question to your student union and also, perhaps, getting some administrative person at your department to tell you exactly what the regulations are for the award of a PhD and viva outcomes at your uni.
Good luck! I know it feels horrible now but you will get through this.