Welcome to FT, GrinAndBearIt!
It seems that the new COS policy (free second seat if you need it) has a problem when the flight is already full. The employees have more reasons to get the flight off the gate promptly than to follow the policy. Flight delays are expensive.
Compensating you after the fact was probably the least costly of the available options when a COS showed up to board an otherwise full flight.
I expect this to happen to me one of these days, and I'll be satisfied with compensation after the fact. It's the way it has to be.