Canarsie, one of our esteemed moderators, just put this to rest. He just completed the Walk a Mile in a Gate Agent Shoes event and posted this:
When a passenger does not show up within 30 minutes — or fewer, if the opportunity calls for it — of their flight, the gate agent will “bust” the seat in the economy class cabin so that it becomes available for stand-by passengers, or in the first class cabin so that it becomes available for those eligible passengers waiting on the upgrade list.
By the way, I learned definitively that if one boards a flight before waiting to see if the upgrade list clears their upgrade, they technically lose the upgrade chance once boarding, although many gate agents are lenient and reportedly do not strictly follow that policy.
Sorry I couldn't remember how to post an embedded link to a thread, but it's post #4 in We Were Delta Air Lines Gate Agents for the Morning