Plato90s and venk are
both right (!), IMO. A recent series of flights pretty much worked that way. Upgrades requested some time in advance, but DFW-ZRH was oversold, so I flew in 13G
and no money changed hands. ZRH-DFW, a connecting Mumbai pax didn't make it, the Gate Angel secured my upgraded seat, cost $75.
Incompetence or a lack of interest could have brought about other possibilities, such as an attempt to assess me $175. But I think persistence with AA in clearing that could have reversed the fee. (I wish I could say incompetence or disinterest are not serious possibilities, but with the variety of human beings and today's airline morale climate, they certainly are.)
non ilegitimi carborundum