I work at CO in reservations. The KHY requirement only applies in the BusinessFirst cabin (a plane which has a J class of service). Other markets such as Mexico, San Juan or Caracas go by the fare rules. Some K fares are not upgradeable, and you would only know this by reading the "rule conditions" portion of the fare rules.

Generally, if you got a good price on a Latin or Caribbean plane with a "Business" class cabin, it is likely not upgradeable.