Good for you!
AFAIK they don't scan for upgraders on waitlist but CS rep can send message requesting space. I've had conversations (where they say "I will send this to another department" and a few weeks later when upgrade still hasn't cleared "strange it hasn't cleared, I will resend message") indicating this manual method.
While nice getting upgrade when no space oficially is made available, I dislike this method. Because it is unreliable and undocumented. I want to be sure I can upgrade at time of booking. If AY can't tell me "yes or no" at that time, I will book with another airline.
Also, the use of unofficial perk system is usually because airline wants an easy way out - they can cancel this perk on a whim.
Other airlines have documented methods for releasing space exclusively to top tier members. Why can't AY?