The standby/upgrade situation has been discussed a lot here on FT (not necessarily related to a GA's friend).
Seems that the general rule is that upgrades for scheduled passengers trump upgrades for standby. I've had several occasions on paid business/first where they got me on an earlier connecting flight, but did not upgrade me- even though they cleared me onto the flight before processing the upgrade list. Is these scenarios, I get an automatic refund for the 'downgrade', which goes counter to the AA way of maximizing revenue...