It could be several things. First, a number of threads here have shown that the front line AirTran phone agents have some consistency and quality issues. Polite they tend to be, but not necessarily up to date or resourceful.
You also mention that other airlines don't do "that." Maybe not exactly "that," but there are plenty of ways each airline's program can drive a wedge between an FFer and a companion.
In AirTran's case, they simply don't do advance seat selection for deep discount tickets unless you are elite. Most airlines allow advance seat selections no matter what. It isn't even an FF issue with other carriers.
But I am glad to see they "maybe" have a policy to cover the situation anyway.
OTOH, when could you upgrade a free award ticket to first class on day of travel for $35 on any other carrier? And NO free ticket award benefit of any kind is denied to a non-elite member in favor of an elite. Nor is there any formula for earning credits that favors elites, etc.