Ok so firstly it may be that not all the seats are actually 'booked' but are unavailable to book until closer to departure.

Secondly BA oversell because they have historical data which gives the average number of noshows on a flight. Of course its an airline practice rather than just BA. They oversell based on these figures so that they are maximising revenue. If a cabin on the day was oversold so everyone who has purchased a ticket shows up then BA look at upgrades/downgrades to get people on the flight. After this they can offer people money to accept a different flight or ultimately people would be bumped from the flight and rebooked.