For revenue tickets, they will refund the difference between price paid for F ticket and a value they arbitrarily assign to Y. There is no correlation between the value they assign to Y and the actual price of a Y ticket.

Let me break this down:

XXX-YYY

Full Y: $1,500
Full F: $2,500
Discounted F: $1,200
Normal Y: $500

Pay $1,200 to get seat in F. Get thrown into Y. Refund = $0.

This is how it's really done.

They don't look at the price a normal person would have paid for the ticket. They look at an arbitrarily assigned value for Y that is orders of magnitude higher than what any normal person would typically pay for that seat in Y.

Result:

Pax paid for F, flies in Y, and over-paid for that Y seat by a factor of 2-3x.

CO gets a 2-3x revenue premium on the Y seat and gets the extra revenue of selling the same F seat twice.

I can't believe this stuff is legal.