My rosy recollection is that in "the old days" (whenever that was) the algorithm was quite good about leaving a handful of seats to be disposed of at the gate. I kind of suspect that the heuristics it uses haven't been changed to account for FCM, both in the sense of the in-app advertising and convenience and single-segment-without-a-refare availability, and more generally in the sense of F being priced to sell these days.

If I had to guess, the window will stay and the average medallion will continue to experience enough upgrades at the window to keep it salient. It's probably a great way to convince medallions to buy upgrades! For example, I have a flight on Sunday, window has passed and same 4 F seats left as before, so it seems nobody got upgraded and as a PM it's doubtful I'll get it, but they're still willing to sell it at $166 for a 950 mile flight. I would bet those get snapped up and would give even odds that there is anything left for someone like you to SDC into at the gate.

(Although as discussed elsewhere, I think SDC for F and C+ should have fare bucket availability requirements like Y. It spoils the commons for people whose plans have actually changed to have a crowd of people who bought 5AM Z fares they never intended to fly.)

As far as proposed solutions go: The obvious one is of course to aim to sell fewer seats, whether for upgrades or SDC or general operational slack or whatever. I think they are in the process of doing the opposite and do not plan to stop. The other obvious one is to thin the ranks of elites. Maybe they are on track at current thresholds after another round of post-covid extensions expiring.

More out there, weight elite benefits more towards ~non-rivalrous goods. For instance Alaska gives meals to its top tier even if they're sitting in Y. Perhaps it adds logistical complexity but loading an extra meal that costs a couple bucks is way cheaper than a few hundred bucks of lost revenue holding back the seat. Maybe bring back sky club access for international GM+ once there are fewer of them. Etc. I have in the past contemplated trying for DM but always shrugged because the incremental benefits are generalky more of what I have now but with higher priority - so I understand the angst people feel about their upgrade success. Mid-tier status feels like a great place to be for the suite of guaranteed enhancements to the civility of the travel experience every time I go to the airport, with the times I end up in the big front seat only comprising a small amount of the value.