Flyboy,
I believe the Concierge was mistaken, are you sure this was an AC Concierge and not CP before the merger? I've seen many cases where there is an Elite waiting to U/G from a H or V fare and the Elite on the M fare that checked in last gets the seat. The case I described above seemed to be a computer glitch. I called one of our help desks and they wanted to know what happened also.