If the notice was given at the time of deposit, I would not refund the fees. Whether the hold was for "reasonable cause to doubt collectability" or "repeated overdrafter" the amount and duration of the hold would have been the same; i.e. no harm, no foul. If the hold notice was not given at the time the deposit was made, the customer is entitled to a refund without regard to whether the correct reason was given for the hold.
Note the language on the model hold notice:
[If you did not receive this notice at the time you made the deposit and the check you deposited is paid, we will refund to you any fees for overdrafts or returned checks that result solely from the additional delay that we are imposing. To obtain a refund of such fees, (description of procedure for obtaining refund).]
Refunds are not automatic. Read your notice. It should indicate what the customer has to do to get a refund...
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.