Originally Posted by
MSPeconomist
No substitution of equipment is involved.
My interpretation of the situation is that while the plane normally has N available seats, on this day it had only N - 2 available seats. (IIRC the OP said that there was an oxygen problem with 2 seats and not all 3 of the seats that were assigned to the family.) Assuming that N people showed up ready to board, the flight was oversold by 2. If viewed this way, it was an IDB for 2 people, with the third getting off voluntarily in order to stay together.
It's not much different from when the airline has a last minute need to find a seat for a "must fly" employee (who can't sit in a jumpseat).
But, a "must fly" passenger is not the same as a reduction in capacity of the aircraft, and clearly the rules make an exception for capacity reduction. The rules were created for an "oversold" situation. That is, to restrict airlines from overselling seats, not to
restrict them from not using seats due to safety issues which occurred on the way to remote location.
The correct number of seats were sold, but the number of seats were reduced after the sale, due to the plane having a mechanical issue.
In fact, the results are the similar to if they had replaced the broken plane with one which had 2 fewer seats, because that is effectively what they did.