My kids have always pretty much stood in a booth to eat when they were 2. They were too big for a high chair, and those booster seats really scare me - they can slide forward off the booth. I have never thought anything of it. If they were sitting on the booth itself they would not be able to reach the table.
Boy, I just started a similar thread 2 weeks ago in TAO, only I was in a kid friendly place and an old man, dining by himself in front of me, who had actually already finished eating and was reading a news paper, complained about my 1 yr old not being quiet enough (he was letting out a loud squeal now and then and I was doing my best to distract him - he was also standing in the booth pending the arrival of our dinner). The old man was so rude to me I had my dinner put in a to go box and left crying. The restaurant staff was mortified by the man, tried to get me to stay and eat, offered to move us, the waitress was stroking my baby's hair and telling me that my kids were beautiful, hadn't done anything wrong.
My thread ended up getting removed by the mods because one mdc mama said she didn't appreciate being at a restaurant unless it was like a Chucky Cheese and hearing other people's kids scream. Boy, there were 92 posts in 2 hours, and another thread even referenced that thread and the other mamas were ripping into that mama like you wouldn't believe for being unsupportive of me (I painted a pretty pathetic picture, won't repeat the whole story here).
Kids DO have a right to be in public places. The op didn't say the child was running around the restaurant, or screaming (I don't think). I think the manager over reacted. And for those of you that have not had it happen, it can be painful when you feel your child(ren) is being unfairly criticized.
And totally off topic, I LOVE SHAGGYDADDY!