I can confirm you can switch seats mid flight. On AC90 (YYZ-EZE via GRU) got the last gate upgrade out of YYZ presumably empty from someone going to GRU that no showed. Got handed two boarding passes with two different seats for each leg. My SE travelling companion was not so lucky, they had to sit in PE and was told in GRU that there was no way to get back on the upgrade list to EZE for the last leg which was mostly empty, until TK cancelled their tag flight.

Like many problems with AC, this Feels like an IT limitation that AC could fix if they wanted to. My two seats proves you can break the flight apart; they could do that for everyone on the upgrade list.