I booked on LH in Premium Economy a week ago. Called LH to get my UA MP attached to the booking (MUN-ORD).

Over the weekend I saw there was upgrade space and used 30 PP to get into Polaris on UA's website. Today when I logged in to Lufthansa, there's an alert saying the flight I upgraded on is cancelled. Specifically, it says there has been a "Flight Status Change," and what's odd is that it is now showing two MUN-ORD flights on the record: one says Business, Status Schedule Change, and the other says Premium Economy, Status Cancelled. I can't make any seat assignment changes because it says I have to correct the cancelled flight.

I've tried calling LH but am getting the 'high call volume' message. My questions are:

1) Will using the PPs to upgrade reduce the PQP earnings since it looks like LH is changing the booking class?
2) What's the best way to correct this? Cancel the upgrade with UA and then call back to LH?

Thanks in advance for any suggestions/feedback.