Please complain loud and hard. If this was just a single person claiming it then I'd put it down to user error, but for multiple people at a location to claim it, it's clearly something that needs to be fixed.

Over the years I've picked cars from literally every section available - from PC all the way down to Compact - and never had a single problem. After all, I'm guessing you booked a Midsize or Full Size right, so if that's what you booked then you should at least have the option to drive that model and not be forced into something bigger when they have the model you booked available.

The last Carfirmation Email I have is from late 2019 (I've had rentals since, but generally don't keep the emails) which states :
Upon arrival at Hertz:

• Go directly to the President's Circle zone, where you can choose any vehicle in that zone and go!

OR

• See a vehicle you like in Five Star or Gold? Just get in and go; no extra charge.