Could just be "mechanic talk", like he is showing extra concern for your bike. He probably just changed it out of rote, since he had the cover off anyway for the 1000 mile service. Probably wasn't listening or didn't get the message to skip the fluid change.

 

Sounds like a stator got burned up. Smells kind a like clutch but worse

 

Easy to check if the stator is bad. Unplug it put a meter on it and set it for AC should produce 19 volts per 1000 rpm. Use 2000 as you test point is you are 38 volts you have the problem solved. By the way we just replaced a stator in a 07. It had burned the wire almost off of it. The fluid is very stinky when they go bad. I am suprised though as checking the charging system is part of the service. And if one is stinky it takes only a short time to test the stator.