In theory yes, in practice this does not seem to be working very well.

I used miles to waitlist an upgrade for my in-laws from EWR-LAX a few weeks ago after their visit to NYC. Figured it would be a nice gesture after putting them into a hotel since our apartment could not comfortably accommodate them. But the upgrade never cleared. So one would think that the miles would automatically be redeposited into my account. Nope, not at all. I've called to inquire and was first informed (incorrectly of course) that I would have to pay a $25 redeposit fee. I asked the CS rep to check on that and they returned to apologize for the incorrect information and insisted that the miles would be returned. No miles returned. I've sent an email explaining what happened. No miles returned. Sort of frustrating that I need to jump through hoops to get my miles back. That's what I get for feeling guilty about putting the in-laws in a hotel and trying to make their flight home comfortable.