SK AAR

Carriers are very reluctant to deal with award tickets of other carriers/other FFP. So it is of no surprise that NH preferred to get your wife to MUC (to resume her MUC-OSL flight) rather than rebooking her all the way to OSL (which would have been required if rebooked via FRA and OSL); most likely NH would have been unable to/or allege to be unable to unless I class/award seats were available on LH or SK to OSL).

Kacee

PEK connections should be avoided for exactly this reason.

Often1

LH has nothing to do with the downgrade whatsoever. Please read the OP.

NH operated the delayed segment and offered her the voluntary reroute which included a downgrade which, in fairness to you, resulted in cancelled out a no longer necessary LH segment.

If OP were to do as you suggest and file a claim for a refund with LH, it would presumably throw up its hands -- if air carriers have hands -- because all it knows is that at some point someone issued a ticket on its flight and then at another point, someone else cancelled that ticket on that flight. LH would deny the claim and OP would lose any subsequent attempts to collect against LH.

I am not even certain that OP would have a claim if the Regulation applied. This was entirely voluntary. OP could simply have continued on, misconnected and waited for the next LH flight with F availability. OP would have been delayed, but never downgraded.

Koru Flyer

Op probably received miles for the new flight, which may be close to the mileage difference.