I'm sure it does exist - as experienced by myself on some of my flights, sometimes the blocked seat was even pointed out to me by the checkIn-agent (this always happened when departing ex germany).

And shortly before I "officially " turned SEN (from former LX TravelClub Gold), I once even asked about this "benefit" at the receception of the SEN lounge in HAM. As it was a quiet Sunday afternoon, the more than friendly gentleman instantly knew what I was talking about, confirmed it and told me that this "soft thing" is generally done by the LH computer system: so, SEN should be assigned seats in the front rows of Y and - if possible - the seat next to the status holder should be blocked. And to underline his statement, he also showed me several seat maps of flights leaving HAM during the next hours: and in the first 3 to 4 rows the middle seat was always blocked...

However, he added that as this is only a "soft blocking" it can be easily overrode by other agents, especially checkIn-agents:"They are famous for this. Most of them do not even know - or care - about this. They think they are more clever than the system. And then, some SEN come to our lounge and we have to sort it out again. I assume more than 40% of staff have never heared of automatic seat blocking - really an example of miscommunication."

But now, hearing your experiences I'm more confused than ever. So seat blocking seems to me like a jackpot in lotto...