Where did I get the information from?
1. Reasoning: These upgrades are typically less expensive than paying the price for a real ticket in Business. (Otherwise it would not really make sense for KL to say that the upgrade is not automatically guaranteed.) The entire concept of this upgrade is close to the concept of Day of Departure upgrade via miles (+ cash if necessary). So it would be pretty inconsistent if you got the full miles that you would get for a real C-ticket.
2. If I remember it correctly, it was mentioned here on FT a couple of weeks ago by someone who actually made use of this option.