FWIW, after experiencing my version of this, I called LH and was told that all economy and premium economy tickets on LH, regardless of fare class / band and *G status, are subject to an advanced seat selection charge. When I asked why I was able to select seats with a clear "included in fare" label originally for both the outbound and return (and with the return still showing confirmed), the agent had no explanation and attributed it to a "glitch".

Then I called AC's concierge line (I'm a SE member with AC) and explained the situation (reminder that this was an AC ticket and the two LH segments are AC codeshare flights), the AC agent was able to select a seat for me on the outbound LH segment without charge. Later, I received an automated receipt e-mail from AC showing that the seat selection would have cost CAD31, but that it was somehow waived with a "AO_TRAVELING_WITH_TOP_TIER" code and "AASFREE" as the form of payment.

Don't know whether the LH agent was right and AC worked some unique magic here, but if so, it feels dumb that LH won't allow any free seat selection even for fully flexible economy and premium economy fares.