The policy can best be summarized in practice as "you'll take what you'll get and you'll like it." As others have noted, there are no guarantees beyond the room you've actually booked - and even then there have been instances of downgrades, albeit rare.
I've had 4 IHG stays this year so far: 2 ICs (San Diego and DC), an Indigo (St. Louis), and a Kimpton (Philadelphia). Of those, the IC San Diego is the only one I'd say honored the upgrades (booked base, got city view corner). Admittedly, the IC DC Wharf was full at the time, and service was pretty top-notch, but I wonder whether the benefits would have been honored there. Indigo St. Louis is one of the worst hotels I've ever stayed at, and Kimpton, while flashy, doesn't seem to care for loyalty beyond their own Inner Circle.
It's a bummer, really, because I had high hopes for IHG Diamond (am IC Ambassador) too. I won't reject IHG hotels outright - if they're the best available where I'm traveling then fine - but I'm also not going to go out of my way to hold onto the status. Hyatt and Marriott are good enough for me.