Four unassigned seats but only D2 availability (assuming D is still "full refundable FC award") means two unsold seats and two FC passengers without seat assignments. At that level I'd expect them to hold onto the seats until about an hour before departure, then release any leftovers into U.
Agreed that the morning departures are better than the afternoon for upgrades, but not a lot better. On this route I always expect to sit in the back.