Thanks for the reply. I understand it now.
But to return to the original question about whether the new site was penalized because of the backlink legacy anchor text that the re-directs transferred to it. To me, this seems like a good possibility. I wonder what would happen if you removed the re-directs and deleted the old site from the web. Then the new site should be on its own, unaffected by the backlinks you created for the old site.
By the way, had the new site already apparently been penalized before you got the BOTW listings?