If you read the policy, you will see that this is way way way blown out of proportion. There is nothing new.

Any elite purchasing a Y fare gets UG ahead of those purchasing lesser fare bases. DL does not look at what was paid for the Y fare. Some organizations, including the government and some larger businesses, negotiate discounts. If your organization negotiates a 25% discount and you purchase what is published as a $1,000 Y fare, you will pay $750 and you will be UG ahead of a higher level elite who pays $900 for a B fare.

This is only more evident in the government context because the discounts are public and recognized in the fare coding as YCA.

Note, before jumping of a cliff, that this applies only to people travelling on YCA fares, which is far from all government travelers.

DL is free -- as are UA & AA -- to shift to a fare paid analysis for UG and not even consider fare basis. But, none of the legacies do and I would not expect it to happen.