I was on MUC IAD on 2/14 in PE (O fare) and was involuntarily downgraded to economy (involuntary is what the gate agent said) due to an inop seat not discovered until boarding was complete and J/O were full.

I filed a downgrade claim under article 10 of EU261 but customer care replied that because the flight arrived on time and was not oversold, EU261 does not apply.

is Article 10 applicable for ANY downgrade or only in circumstances accompanying a delay or oversale?