What happens if you both pay for a preferred econ seat on LH, and also put in a PE upgrade bid and win?

I'm flying TPA to FRA next week on a UA-purchased economy award flight. If l go to my booking on the LH website, I can bid on a PE seat. (I can't find any direct $$ upgrade offer, for cost comparison, if it would even exist). I also see that all of the regular economy preferred legroom front row is open, and a dummy booking shows that selecting those seats is an extra $85. If I call LH and ask to buy the extra legroom seat and pay the $85, and then also make a PE bid offer which later wins the upgrade, then what happens to the $85 I would spend on the preferred seat? Goes out the window, or refunded?

Also, if you win a LH upgrade to PE, does that come with a free seat selection? Also trying a dummy LH PE booking directly, it shows selecting any specific PE seat is an extra $50. For now, PE shows 16/28 seats unclaimed, but no idea how full it really is.