Gotcha. Yes, it would likely still work even if the nominator cancelled at the gate. Once an upgrade is applied, the system isn't very good at checking if it the ticket is still valid for an upgrade.

As an example of it working, I've seen someone (in the span of 5 months) buy 2x B fares on a PNR, upgrade them, split the PNR and then modify their own ticket, leaving the nominee's ticket and upgrades intact. In that case it wasn't actually planned as a workaround, they had been intending to fly together but a last minute work emergency meant the nominator had to delay their flight. But either way, it still worked.