I had a similar situation earlier in the year PVG-LAX.

I used my system wide upgrades for myself and a business associate. He had no status and I am 1K. I checked in a T-23 online, he checked in at the gate.
Both were from the same PNR that had been split.

He was #4 on the list and I was #7. As time went on more people were added between us. I ended up making the upgrade but figured the upgrade process in this case was broken and maybe someday it would be fixed.

Looks like there are still similar problems.

The common denominator seems to be the SWU from another 1K or the splitting of the PNR? The latter makes more sense to me if it somehow appears as an earlier purchase date in the system?