I've not seen this, but it does not surprise me.
There are plenty of people who have told us - on these very pages - that they make a second reservation and then cancel if they don't like the car allocated to them, or if they have been offered a better upgrade from the other reservation, and they can do this in real time with no penalty. That leaves the rental agency with a car that they can only sell to a walk-in customer with no reservation. I doubt that they get that many of those for the higher category vehicles.
We the customers may not like it, but it is hard to argue against the logic in business terms. Let's face it, hotels have been doing this for years.