I was all-in for $7000. The dealer said she is all in for 7. Everyone folded to the big blind (4000), who looked at his cards then pushed his chips in. I thought he was folding or calling. Since we were the only ones in I turned my cards over. The dealer said that because I turned them over before he could correct his bet my cards were mucked.
If a player is in last position, facing an all-in bet of more than his stack, moving chips across the line (or with significant forward motion if there's no betting line) is equivalent to saying "I call", even it it's only one chip. At that point, the hand should be over and go to showdown.
This ruling is so monstrously wrong I suspect you are misremembering some other important detail.
This is hard to believe, because the ruling doesn't make sense under any normal set of rules one would find in a casino poker room. Apparently, as has been pointed out in a comment, the dealer of this actual hand perhaps felt bad about providing this ruling and asked about the same hand on Reddit. The missing information is:
I want preface this by saying that it is a house rule that if a player prematurely turns their cards or exposes them to other player, their hand is dead. All chips that the exposed player has bet are are forfeited and their cards are dead.
Given that rule, if the big blind (BB) hadn't completed his turn yet, then by a strict interpretation of that rule, your hand should have been mucked. This raises two questions:
- Was BB's turn over?
- If BB's turn was not over yet, should the rule have been enforced?
For #1, I agree with your assessment that BB's tossing his blind into the pot signals either a call or a fold. (By this I mean, even had you not been all in, BB would not have been allowed to raise at this point.) I'd probably lean towards this being a call, and had there been one additional chip beyond the big blind, it would clearly be a call. Had the cards gone in, it would clearly be a fold. Ideally, the dealer should have immediately either collected BB's cards or told him how much more to put in. Surely that would have happened if you had waited longer. Since it's not entirely clear what BB's intent was, I think it's fair to say that unless there was a rule specifying what putting one's big blind in means, from the point of view of the dealer, BB's turn was not over yet.
This leads us to question #2: Should the rule have been enforced? I wish I could say absolutely not, but I don't really understand the point of rule in the first place. Whatever the reasoning is behind the rule, I don't think it is designed for this specific scenario, where you legitimately thought the hand was over, and more importantly, if it wasn't over, you gave a tremendous advantage to your opponent. The far better decision by the dealer would have been to ask BB if he was calling or folding, even after seeing your cards. This is what normally happens in every card room I've ever played in (at least 25 in the US), and I've never heard of this house rule until now. It's too bad that the dealer made this decision, and also too bad that there wasn't a floor manager to appeal to. But, given the wording of the rule, I wouldn't put all of the fault on the dealer. I hope this hand highlights that this is really a bad rule, as written, without exceptions.
Side note: many casinos have a rule called "show one show all", which usually means if you show one player your cards who is still active in a hand (not all-in), you have to flip them over and show everyone, and you'd have to play the rest of that hand with your cards exposed. In weird instances, the same rule means if you show one card you have to show "all" (both) cards, but that only applies after the hand is completely over; in other words if you are trying to be cool/funny/etc and you show one of your cards, after the hand is over any player can ask to see your other card. (I think that interpretation of "show one show all" is simply to discourage showing a card.) I mention this rule though, as proof that the rule you ran into is not only a bad rule, but is pretty much the opposite of what many well known card rooms have.