Sounds like IT incompetence compounded by more IT incompetence, but it does not appear that you were denied boarding. You elected not to board and take the available middle seats offered to you.

Did your discussions with the agents get into the details of the "fact" that your A fare was not a FC fare, but just a coach fare with an auto upgrade?

That would likely have factored into any assertion that you were denied boarding, since a coach seat (which they would assert is what you purchased) was available for you.

Please understand that you have my sympathy. I'd be frosted too if I were you. Just telling you how I would anticipate this would play out, based upon my experience and what gets posted here.

At least as a DM, you had the Sky Clubs where you could relax with a nice beverage during your delays.