A3, like most airlines, will overbook. On my first-ever Aegean flight, they asked me at check-in if I would be interested in taking a later flight on a different airline, despite the fact that I was booked in business class.

I don't see it as "denying an upgrade". The customer (at least on the Aegean website; most TAs will only show the cheapest available ticket option) already presented the customer with the chance to select the ticket conditions they require. If, later on, the customer decides a different ticket then nothing that is written here prevents them from buying a new ticket with the new conditions. This idea that they can "convert" the original ticket, or put its value towards the new ticket, seems to be what is behind all these queries. But for a non-changeable, non-refundable ticket, wishing to do this is pointless. You end up paying more than you would to buy the new flex ticket outright; and even after paying more, the ticket is still, or should be, bound by the original ticket conditions.

I agree that there are other reasons for wishing to upgrade to a higher booking class than these apparent attempts to make a non-refundable ticket fully refundable. But again, I see nothing wrong in making this exercise more expensive than just buying a new ticket outright.

It is not illegal to charge a handling fee to process refunds; many European airlines do so.