I had the same problem with my SEA-SFO and SFO-DEN leg, which showed "Upgrade Available" but when I accepted, I only cleared SEA-SFO (757) and received a DM card for SFO-DEN (767), which I did not clear.

I was not happy to blow two 500 milers for SEA-SFO when I already had 8D, but by the time I checked in at the RCC in SEA, the Exit Rows had already been re-assigned so I had little choice (E-).

When I checked-in for my SEA-LAX and LAX-IAD flight last weekend, it told me upgrades were not available on either leg, yet offers me a paid upgrade (which I decline as I didn't want to upgrade, period). SEA-LAX then went out with 5 of 24 seat filled.

It has been my experience that "Upgrade Available" means just that - they have NF/NC/X/I space available right then and right there. I can only guess with UA's new policy of trying to sell upgrades before processing the waitlist at the gate, the system is getting confused (offering upgrades because it shows NF/NC space, but that space is being held for paid upgrades so the system puts you on the DM).

My new policy with 500 milers is to either call and speak with an agent within my window (bypassing the automated systems) to see if I can be confirmed right then and there. I don't want to risk burning extras if the system puts me on the DM and I have to clear by segment.