I have had this happen at a couple of locations, no there was no notification and yes cars were just handed out as you stood in line (no there was not an "executive" line so you could claim the "best" car. ) Last time it happened I did refuse to take the Tahoe or whatever the heck the GIANT suv was they tried to force on me
The worst ever was National's sister company Alamo. After an hour they admitted, it could be several more before we have a car. I told them to cancel my reservation and went back to the airport and took a cab. On my next credit card bill they charged me! (I got it reversed and have NEVER rented from them again)