Brace yourself, but depending on the service issue, even a guest with absolutely no HH status could be upgraded to a suite. You don't provide any details here, so perhaps the UG was not appropriate in the case you reference, but without details there's no way to tell.

Think of a restaurant. You might have eaten there once a week for two years and never had a meal comped even though you are a loyal customer. Someone dining there for the first time finds a worm in their salad, and gets their meal comped. Is that somehow unfair to you because they have 'lower status' but still got a comped meal? I would say no, the manager handled service recovery as he/she saw fit.