Let’s not mince our words. “Upgrading” from Club to an F seat that cannot recline is, in reality, a substantial downgrade. On many of my shorter overnight sectors (typically East Coast back to UK), I get on board, have a glass of champagne, and go to sleep after take off. If available, I would take a downgrade to Club to get a flat bed. I’d deal with the ‘compensation’/service recovery later.
My take is this. BA needs to make whole. That requires an assessment of the value of the amenity that has been lost. For a seat that won’t recline, that may depend on several factors (length of sector, whether overnight etc.) 140,000 Avios, if that is the going rate, seems about right. I certainly wouldn’t quibble with that after the event, unless there were some very unusual aggravating factors. But I do think that, if the facts of the instant case support it, and if the disgruntled pax does not want Avios compensation, s/he could push for a refund of any fee paid to upgrade. As noted, BA not only failed substantially to deliver the benefits of the upgrade it substantially downgraded the experience. That sounds to me like a solid foundation on which to build a case for a refund.