That can be the case, or because of waitlist (including award) clearing, or plainly because the flight is way overbooked. Op-ups at check-in happen quite often these days. >5 years ago, op-ups (especially for ex-HKG flights) often happened at the gate. They would have a stack of BPs (sometimes even 20-30 of them) at the gate. When a BP is rejected, the gate agent would call out the BN and someone would scramble to find the replacement.

I think doing that at check-in (or at a lounge) can reduce the chaos at the gate, especially if a passenger prefers to sit with his/her traveling companions and declines the op-up.