The 36-year-old Bedford fought back from 3-2 down to win the final two frames in the Players Tour Championship third round contest in Gloucester.
And with no prize money awarded to those who bow out at the last-128 stage, O’Sullivan – one of the sport’s richest men – ended up £100 down having paid the three-figure sum to enter the tournament.
O'Sullivan has career earnings approaching £7m from the sport, so will not feel the pinch, but having looked set to step away from the game after winning the World Championship earlier this year, it was an inglorious return to tournament snooker.
And it was the proliferation of these kinds of tournaments, leading to a crowded calendar, which had O'Sullivan deliberating over whether to join Stephen Hendry in retiring from the game earlier this year.
His opponent Bedford had only qualified for the World Championships – held at Sheffield’s Crucible Theatre and won four times by O’Sullivan – on one occasion back in 1998.
And having made just over £10,000 in prize money over the last two seasons, the left-hander from Bradford works part-time as a snooker tutor to make ends meet.
Bedford marched on later in the day, winning his fourth round contest against Adam Duffy also by a final-frame decider before bowing out of the last-32, losing 4-2 to Rod Lawler.