To the new Upwork mods: I mean no disrespect, but you need to read the questions and make sure you understood them before answering. Otherwise, let seasoned users take care of the answers.
I believe you did the right thing by asking for your regular hourly rate. I suspect the "test" job is the actual job, and they are using you to get it done cheap. There is nothing wrong with doing a low fee test job, but one is all I would do. The client can take it or leave it. It may not be against TOS for a client to ask for more test jobs, but it isn't against TOS for a freelancer to refuse, either. As for myself, I try to avoid the whole "test job" scenario, anyway, since I suspect most of these so-called "tests" are actually the entirety of the job. If a client can't tell if I'm the one based upon my portfolio and client feedback, then he's not putting in due diligence, anyway.