You might have screwed up your own plan.
If you did the following:
1) Apply for Plus + Business Upgrade via OptionTown for flight A
2) Apply for Plus Upgrade through Confirmed Point upgrades
2) will be usually cleared pretty much in advance of the departure date and they will exchange the ticket. It might be that OT will not be able to find the new ticket to clear their upgrade or they push it out of the queue as you were messing around with the reservation, e.g. they can't sell you a Y upgrade anymore as you're in Y already.
That your confirmed upgrade cleared was an pretty clear indication that the flight was oversold since they only clear the confirmed upgrades if the flight is overbooked or has award seats available in the new cabin class. Based on that I think the OT upgrades would have cleared.
So far my experience:
- If the flight is oversold, OT usually clears - given there are seats in the new cabin and there are not too many other OT bids and they have to draw from the pool
- If the flight is quite full but not oversold, the chances are slim but it is possible - -t seems that in this case SAS hands out only a couple of seats for OT upgrade. Had the situation once that a colleague was upgraded with OT and my upgrade was denied - so I joined him in C using points at the gate. Might be also that OT limits upgrades themselves for whatever reason.
- If has a pretty low load factor OT will for sure not clear - there are some exceptions like first timers
- OT Upgrades take priority over Opups - as long as the booking situation is clear when desk check-in opens. If suddenly a IRROP pushes 50 more pax on the plan the gate agents will process the opups regardless of OT as they have closed down by that time already
- Upfront confirmed upgrades through EB take priority over OT Upgrades
These are my guestimates based on experience and talks I had with gate agents and SAS staff. Not sure how reliable those are.