Just a thought here: Could the issue be that LH came up with a good idea to please HONs/SENs where possible (i.e., flight not fully booked), but some of us (myself not necessarily excluded!) have a tendency to look at this as a genuine entitlement?

LH seat blocking in intra-European Y works fine for me most of the time - in fact, it just did on my flights FRA-VIE and VIE-FRA, where Mrs LH_Fan and I had three seats in Y to us and blocking of the middle seat was confirmed by the check-in agents.