First, I'm guilty of the same practice. Occasionally, at no more than a putt, I'll move the boat with a rider (or skier) sitting with their feet on the swim deck. When the boats underway everybody is sitting in a seat.
Sounds like you were operating your boat in a civilized manner, and it's unfortunate this happened to you. I don't pretend to know WI rules and regs, but here in WA it states:
"Not maintaining proper seating regulation aboard your vessel. In Washington, it is unlawful to allow any person to ride or sit on the bow, gunwales, transom, or on the decking over the bow of the vessel while underway unless such a vessel is provided with adequate guards or railing to prevent passengers from falling overboard. Passengers or other persons aboard a vessel may occupy these areas of the vessel to moor or anchor the vessel, to cast off, or for any other necessary purpose"
I'm sure we all have war stories, so for what it's worth here's one of mine: Years ago while boating in OR, we had two adults and six very young kids in an idle boat; two were about to go tubing. Everyone had their own seat. All the youth had life-vests on. We were approached by the Sheriff and the (new) deputy. The deputy thought we had too many people on board. This boat didn't have a persons limit, but rather a weight limit (like our Toytotas). There was no way we exceeded the weight limit. Not winning that argument, She decided a full boat inspection was in order... right down to 'the white glove test' on the belly of the carb. We passed everything right up to the last thing, the fire extinguisher. The one on-board was twice the size of the legal minimum, yet the needle was border line green. And you should of heard the satisfaction in her voice when she took note of it. We were cited and kicked off the lake. Man we were very upset about it at the time. I wrote a letter to the judge, and the fine was reduced somewhat.
Anymore I don't point my frustrations with the law enforcement officers, but rather the DUMB a$$es who operate their boats in a lethal manner... for then the law tightens the screws on all of us , even for the small silly stuff.
-WNF-