My experience has also varied. In properties where I am a regular, I have done OLCI and then gotten a nice upgrade on arrival.

Tonight, I checked in for the first time at the Hilton in Times Square and held off using it when I looked at the available rooms online and by the time I arrived, I got a nice upgrade to the 43rd floor. YYMV.

As for the OP, definitely user error IMO. Prepaid rooms do come with additional conditions.