This has happened to me at CDG as well, only I was using a SSWU as an AC*E. I think it boils down to the staff processing upgrades, then reopening the upgrade list.

Once they have processed upgrades, they should close the list - and any future comers should simply be advised that no upgrades are available.

If you asked for an upgrade at the last minute and were told - sorry, all full, then you'd likely just take the Y class seat without question.

But, in CDG they shuffle it around right up to boarding. In fact, I think I've read on this board that they actually boarded the plan to downgrade someone once.

I receive quite a satisfying amount Aeroplan points and a decent MCO for customer disservice.