LAN has OW rules that are specific to LAN (so it isn't a spin on the rules, it is adding rules to the program that they wanted). One of those is that domestic flights in Chile are booked in Y for A/D; and IPC is a domestic flight. But LAN appears to often waive this rule, perhaps from getting too much grief (or because they are not good at following any rules). The A inventory issue is simple: most of their F cabins are 5 seats, so releasing 1 seat is 20% of avalable seating (and airlines seem to target award seats as less than 10%). LAN solves this by releasing none automatically and treating each A booking on an individual basis. This means your travel agent or booking airline has to negotiate with LAN to get a seat released for your flight. Other airlines do this for some of their flights (even AA does this for their P product yet there is reasonable availability upon request, though I suppose it varies by who is requesting).
I have mixed feelings about LAN. Not a bad airline, but not a good airline, and one of the weaker members of Oneworld (in terms of product quality). However the other SA airlines are worse so OW is lucky to have them.