I think the key here is in this statement:
“doesn’t have exposed coils. I used pro pink insulation around box”
Basic refrigerator theory: Cold plate inside the fridge extracts or ‘compresses’ the heat. That heat needs to go somewhere to be dissipated to help heat the room – that somewhere is the coils. In your fridge, the hot coils are just under the skin of the fridge. It is much cheaper to manufacture this way. If you take a look at the pictures from this thread Mini Fridge Disassembly you will notice the coils.
What you did by putting the insulation over the coils is you did not give the heat anywhere to go. In fact, the insulation you enclosed it in is likely better than the insulation in the fridge – this means the heat from the coils is more likely to enter the keg box than escape it. You are cooling and warming the box at the same time!