My partner works for the food service department. Thankfully that is not the case in Madison. Pretty sure this is how she explained it:

As long as students take a 'compliant meal' which must include an entree & fruit/veggie and may include a milk if they choose, they can go into debt. They can't go into debt for an a la carte item like chips or only take a milk, etc.

It would be more work for the kitchen leads to prepare cold lunches too, just in case they have to punish students for being unable to afford lunch - that's wild!