Indeed, and this is not new. This has been policy for many years. Points and promotional upgrades merely get you a better seat and on board service, nothing more.

To receive all of the benefits of a premium J or F ticket, you have to pay the fare difference to have your ticket reissued in a J or F fare bucket. Otherwise your ticket still shows, and you are travelling on, the paid-for Y or J fare bucket you bought originally, and those are the entitlements you will receive, plus a seat in the higher cabin on board.

As with (P) fares connecting to intra gulf flights, it is the fare basis you are travelling on that determines benefits and entitlements, not the cabin you may be sitting in. The fare basis is shown on the eticket, immediately to the right of the cabin class. The first letter of the fare basis indicates the fare bucket you are travelling on. So whilst the cabin class may say (U) after an upgrade, the fare basis will still be (O) or (Y) etc.