Issue Updating Customer Record

Hi All,
I am having an issue doing a simple customer update and I need your help.

I am logged in as an admin. I do a Customer search with bodyFieldsOnly set to false. I compare the customer's CustomerAddressBook entries to a new address, if they do not match I add a new CustomerAddressbook record to the customer and call service.update(customer).

My preferences are as follows:
Preferences pref = new Preferences();
pref.MustUnderstand = false;
pref.warningAsError = false;
pref.warningAsErrorSpecified = true;
pref.ignoreReadOnlyFields = true;
pref.ignoreReadOnlyFieldsSpecified = true;
pref.disableMandatoryCustomFieldValidation = true;
pref.disableMandatoryCustomFieldValidationSpecified = true;

In setup > Integration "Use Conditional Defaults on Update" is checked (I also tried unchecked)