Doesn't make sense to force the 500 upgrades to be deducted by sponsor....
My guess is that AA gets to deplete the number of (temporarily stagnant) upper status member (Plat Pro and EXP) upgrades and then be forced to purchase 500 mile upgrades.
Just another underhand way to get a few extra $'s from their most frequent flyers.
Sad.... Please rethink this policy or at least allow us to earn 500 upgrades for use later... I know, I know... this will cost AA a bit of extra revenue......