Yes that might explain quite a bit. If it is not just a "system" problem to be addressed by a trouble ticket then it sounds like you are being treated as if you are now on the equivalent of the AT&T Unlimited Choice plan for you iPad. It is an unlimited plan that provides up to 3 Mbs speeds until you get to 22 GB and then it may be slowed. It also does not offer the Personal Hot Spot option which seems to match what you are experiencing.
For reference here are the relevant Terms on the original $20 iPad / Tablet Plan:
AT&T UNLIMITED TABLET PLAN: Requires a single line AT&T Unlimited Choice, AT&T Unlimited Plus, AT&T Unlimited Choice for Business, or AT&T Unlimited Plus for Business plan ("Single Line Plan"); multiline plans are ineligible. If you become ineligible, AT&T may move you to a different plan with same or lower monthly charge. Once moved, you can move to any currently available plan.
Unlimited Data, Tethering, and Roam North America Feature: Same speeds, terms, conditions, restrictions & limitations as your Single Line Plan. Tethering requires compatible device.
Talk & Text: Not included.
Pricing: $20 monthly plan charge (in addition to monthly charges for Single Line Plan).
Devices: Sold separately.
Limits: Tablets only. Only 2 AT&T Unlimited Tablet plans can be associated with your Single Line Plan; only 1 if you also have an AT&T Unlimited Wearable plan.
Availability: Select locations only.
AT&T UNLIMITED CHOICE℠: Data speed limited to a max of 3Mbps. Plan is not eligible for Stream Saver, but for content we can identify as video, speed will be at a max of 1.5 Mbps at Standard Definition quality (about 480p). Data and video speeds will be capped at amounts shown above, regardless of the network your device is on (for example 4G LTE, 4G or 3G). After 22GB of data usage on a line in a bill cycle, for the rest of the cycle AT&T may slow data speeds on that line during periods of network congestion. See
att.com/broadbandinfo for details on AT&T network management policies.
Tethering and Mobile Hotspot use prohibited (except for Connected Cars).
Dave