About a week ago, I had the same incomprehensible pop-up window ("We are sorry but redemption bookings cannot be upgraded using Money") when I tried to upgrade a revenue flight using Avios. I ended up calling BA, who then told me that there was no award availability for the cabin I was looking to upgrade into. There was no connection at all between that fact and the pop-up window.

There is clearly a website link/programming error, which I reported when I encountered it, but which clearly hasn't been addressed.

Call BA.