So, as somebody who obviously doesn't learn by past experiences, I booked another car from Sixt Dubai for last week. And... It was a far better experience this time. I booked a MB C class and scheduled the pickup from the Mercedes Dealer on Sheikh Zayed Rd (The owner of the MB dealer owns the Sixt franchise in Dubai).
Other then it taking about 20 minutes per customer to get paperwork processed (i was behind 1 other person and had to wait 20 minutes and thought it was a fluke, but it also took 20 minutes for them to deal with me, which seems incredibly inefficient), things went smoothly. They upgraded me 1-class to a MB E. I asked them about their upgrade policies and they said that for Platinum it is a 1-class "if available". For a Diamond members they upgrade 1-class guaranteed.