I've seen cases where someone in ops clicked the wrong button, and then undid (most of) it, which resulted in an entire plane of people losing their seat assignments. But that's exceptionally rare (and hard to even determine from the outside, unless you have someone reading notes on the flight).

In other cases, they're down a FA, and have to restrict the load to the next lowest multiple of 50 seats. If that means they don't have the capacity for all confirmed pax, cancelling the flight triggers automatic rebooking for everyone. A lot of people would end up on the replacement flight, but someone flying YVR-YYZ-LHR might get rebooked on YVR-LHR, which is generally better for the pax, and frees up a seat on the restricted YVR-YYZ.

If they just change the capacity on a 789 from 298 to 250 (likely done in Y, so 247 to 199 in that cabin), then they just end up with an overbooked flight, which becomes the responsibility of the GA to deal with. I don't think the automatic rebooking system would kick in until the extra pax are actually offloaded, and alternate routings might not exist at that point.