Even for relatively clear FFCC situations one often has to argue with the agents, but is the following an FFCC situation? I think the answer is no, but first hand accounts (or inside views) appreciated:

Connecting passenger ticketed in M is cleared for upgrade on segment 1, but waitlisted for segment 2. SWU collected at originating station. Passenger put on DM list for the connecting flight. Which priority applies? Anything special since SWU was already collected so pax has already "paid" for the upgrade?