It depends...

Actually happened: I was upgraded, companion was not. I wanted to surrender my seat to someone else--& specifically the person sitting next to companion. Lead FA contacted gate agent--who would not allow it, because elites on waitlist would "witness" it, & presumably object. Gate agent would only allow my surrendering the seat to elite who was first on waitlist--but that person was not the person who was sitting next to companion. Gate agent told lead FA that once the door was closed, it was up to her. She immediately stated, "no way"--not wanting to risk the wrath of an elite who might witness the exchange.

So, for the entire flight, I sat in FC, companion sat in coach.

Needless to say, I was not pleased w/ the outcome...

Many, many others, however, have been allowed to do the very thing I wanted to do.

In this particular case, I would not have been allowed to exchange seats w/ companion, let alone a stranger.

I understand the logic behind my having been blocked from doing what I requested, however. I can appreciate how a waitlisted elite sitting in coach might object to a complete stranger being able to take advantage of someone else's elite status--& a someone else who was given relevant FC seat inventory yet chose to sit in coach.

Waitlisted elites do not choose to sit in coach.

I am a bit conflicted regarding the issue.