Refine with head points should is not recommended for Subjects using default anatomy.
Acquiring head points gives as results a cloud of head points that captures the shape of the head, so if you have the Subject's head surface (from their anatomy) it does make sense to try to align the cloud of head points and the head surface, as they are obtained from the same head. However, when using default anatomy, the refinement algorithm is trying to align an individual's cloud of head points with a head that is not the subject, thus the bad result.
In the case of a subject with head points, but without anatomy. There are two options to follow
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Use the default anatomy and default cap, the head points are ignored
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Create a "Subject's anatomy" by warping the default anatomy to match the cloud of head-points.
https://neuroimage.usc.edu/brainstorm/Tutorials/TutWarping