I've mentioned this in a few other threads, but the primary driver for someone getting downgraded is obviously an oversale where even at the last moment they don't get a no-show. At which point, those without seats allocated are at risk. That particular route does have a lot of on-carriage so it's bit unusual that no-one missed their connection. In the other direction if you had an on-carriage then they would try harder.

Now, as to why a GCH got downgraded, usually they are prevented because (a) they had a seat allocated via status and (b) they tend to check in for that seat well before the airport check in opens. We've only had a few details here from the OP so it would be good to hear more about the context here rather than me waxing lyrical about unrelated factors. One key factor is a late ticket purchase, which then doesn't allow a seat selection, which in turn leads to "last on, first off" - and status won't save you, nor will the fact that you paid more your ticket than anyone else in the cabin.This, incidentally, is why I've tried to debunk the myth that 2-4-1s are prone to downgrading - they can get caught in the cross hairs but that is by accident rather than design.

The OP is entitled to EC261, see the main thread, and as previously advised, always accept, indeed request if not offered, the cash card. It does not impinge your EC261 rights.