well its my understanding that the lien holder, the bank, had the option to have the title marked or keep it clean and they chose to keep it clean.
The lien holder doesn't care as long as they get their money. The insurance company is paying the bank. If you had the title they would pay you. Doesn't make a whole lot of sense why the bank would have any input.
Depends on the law in your state. I know that if a car suffers a total loss from water the title must be branded. At least in Virginia.
I drove through about 6 in of water at 35mph and it created a wave of sorts up my firewall leading to water entering the intake mani which was above the exhaust mani (1gn neon). The car was never flooded per se but since I placed a claim against my insurance company they totaled it out and branded the title. I had the original title in hand and received a notice from the DMV about 45-60 days later wanting the original, and they would re-issue a branded title at no cost.
Whatever people say get it in writing/email/recorded conversation etc.