In my case, nothing much happens. I use to be booked, for instance, in (confirmed) C Class and (waitlist) Z Class on the same flight. Often times, a Z seat is confirmed and then have two confirmed seats for the same flight. What I do, as a courtesy to other passengers, is to cancel the high-fare one when the low-fare is confirmed, but I'm not forced by LH to do it. In fact, I was told by a LH lady that I could hold them until the minute the flight is closed. I guess, if someone was waitlisted, they would react accordingly. It might be because of my status (LH Hon), but it also happened being a SEN.

On other occasions, I make two entirely different reservations, that, for instance, have a common leg. It often happens to be confirmed on both, and then cancel the one that doesn't suit my schedule at my convenience. Pretty flexible.