The agent is correct. Free seat selection is a gold benefit and does not apply to silvers or below.

In terms of the process itself, "linking bookings" (called TCP - To/Total Complete Party) is available to any status, it is not a gold specific benefit. All TCP'ing two bookings does though is add a note on one referencing the other. It is not any kind of merging of the bookings, and nor does it provide any protection for connections when linking two separate sequential bookings. The linking can be done by the BA agent on the phone.

However, what is a BA gold benefit and not available for OWEs or other BA tiers is free seat selection for the non-gold/silver booking passenger. If you are a GCH and there is someone travelling on the same flight and in the same cabin on a separate booking, you can request free seat selection for the other person so that you can sit together. This second step, after doing the TCP, is usually sent off to the infamous back office to process and takes a few days to do.

The benefit is mentioned on BA.com:

http://www.britishairways.com/en-us/.../gold-benefits