What happened to the OP is really unfortunate especially being proactively downgraded. I had that happen to me years ago on a paid AC business class ticket booked in " C " on a UA codeshare.

We misconnected in Newark on our way to Italy. All flights were operated by UA, sold by AC. We were sent via FRA but the agent originally only wanted to put us in economy as we were Air Canada passengers and they may need those last two seats for their own passengers.

I found another agent at the UA club and told them that I just noticed that we accidentally got rebooked in economy ( no harm in a little lie) and the agent there said we lucky as we were getting the last two seats. Looks to me like each employee is free to make up their own rules.

I am curious though and wanted to know if in case of a premium cabin being overbooked; does priority go to a passenger booked under the operating carrier over a codeshare regardless of fare or is it status, fare class, check-in? Or is it at the discretion of the agent? I ask because I have different answers from may proceed differently but are still making good faith decisions. They work hard and have to deal with a lot and it may happen that the last seat is allocated not following the " official order " with no ill-intent.