I've seen the "F0 C0 J0" coupled with "#1 on the upgrade list with 2 seats available" scenario before March, so it doesn't look like it's anything new for DM.
Not at all. That happens when there is a Miss-connect or no-show. I will say that the practice of blocking the middle seat on International Y flights for DM's would be great. UA did this when I was 1K and while they always told you that if they had a buyer the seat would be sold but if not it would stay blocked it did make for a much nicer flight most the time.