You can call it an assigned seat if you like, but Icelandair does have this disclaimer when you select seats when purchasing a ticket on their website:

"The Carrier will endeavour to honour advance seating requests if possible, however it cannot guarantee any particular seat.
The Carrier reserves the right to assign or reassign seats at any time, even after boarding of the aircraft. This may be necessary for operational, safety or security reasons."

You will not know for certain where your seat is until you have your boarding pass, and even then it can be changed by Icelandair to fit their needs.