I imagine the good news is most airlines take real world business impact in addition to DoT or CoC language and rights. Yes they can involuntarily downgrade a J passenger to Y and issue a partial refund as the only form of compensation but if they made that common practice or the first line of defense I would imagine that would have some sort of negative impact on how much passengers seeking to travel in J would choose AA as their preferred carrier. That is why even if DoT or CoC allow them to involuntarily downgrade J passengers in practice they will generally do that only after they have tried to solicit VDB volunteers in J and considered other options to reroute the passenger on another acceptable routing in J. I don’t think they resort to involuntary downgrade to Y as the first option even though the terms allow them to do so.