IME, the companion upgrade system historically was a black box. Sometimes your companion would stay with you on the airport list, sometimes you’d be separated. Sometimes upgrades would come out of your account sometimes out of the companions accounts (if both were elites, but different levels). There never seemed to be any consistency, not that I could ever figure out.

Maybe this is just an attempt to formalize the policies and procedures.
But not sure I saw in the page link posted whether a higher level status member can sponsor a lower level status member and how exactly that works.