This is super confusing to follow regarding the all the price talk.
However, it does look like the customer got almost a complete overhaul for cheap even if they have to lay down the mulch and pop the plants in the ground themselves.
It does sound like the customer played you though. Basically they wanted to buy the materials and have you do the labor. Also walking over you with the whole "can you do this and can you do that"
I assume you only take checks or cash. They were quoted at 400, but you came out with ~1000. Many people simply do not have it in the bank. Just something to think about when you do future jobs.