I am still confused about prioritizing by fares, within a given tier?

Does one get prioritized according to fare, or not?

I was under the (mis?)impression that one (at least in practical terms) usually does not get prioritized for upgrade within a given tier status by fare status, but just gets upgraded on a first-come first-serve basis. However, I was under the impression, that in theory, upgrades requests are prioritized according to fare, but in practice this more often than not does not happen?