It doesn't do it automatically.
MCO - STT
Bid for 4 seats at $35 (lowest Good bid). When I bid there were 5 upfront seats left. Didn't win the bid. During checkin I saw 3 seats open in seat map. At the airport they asked for $20 to upgrade 2 seats. Gladly took it up.
it ended up being a fairly empty flight in the back too. Less than 75 people, so the other 2 were able to spread it in the back.