After reading multiple people post this, it just (finally) clicked in my head. Better late than never. Just because someone is on the standby list does NOT mean that they are not paid F, which would put them ahead of a complimentary elite upgrade for an empty F seat (right?)

I have certainly been in paid F on the standby list before, though on VX which didn't have complimentary upgrades (thus making the logic a lot simpler)