Whilst this will make some customers happier, with more upgrades getting processed, in reality it appear to really be all about QF maximising their return. Assuming that they really want to process upgrades (and redeem the points) rather than fly with the seat empty (i.e. once there is no chance of selling the seat, as boarding is underway, the best extra revenue available for the seat is the upgrade points, and that revenue exceeds the marginal cost of the extra catering), then this gives them much more opportunity. Why Op Up a passenger for nothing, if they can change their systems, and move a different PAX who will give them points in return?
Assuming that quite a number of upgrade requests are not fulfilled (not really an assumption, I think it is fairly obvious that this is the case), then this is likely to reduce the Op Up incidence for higher status pax. Where last minute changes are required (missed connections, passengers to be moved to alternate flights) that need additional seats in a lower class, the current state would be to Op Up someone (as all the points upgrade processing would have completed) - now they will be able to go back to the upgrade requests, and clear another one, and claim the points. Pure win for QF in reducing outstanding points liability.
If you have placed an upgrade request, checked in to Y, have forgone the lounge (as you don't have status), are steeled for the whY experience, and don't want to "waste" your points without obtaining the full benefit of the class of travel (lounge access, baggage allowance etc.), then you should be able to cancel your upgrade request at that point. Should solve the problem of being advised at the gate of an upgrade that you don't want anymore (and you will thereby improve the chances of those who want the seat an onboard service).
As an aside (possibly slightly OT), does anyone know how the Class of Travel UK departure tax works for Op Ups (and points upgrades like this). Obviously the passenger doesn't get slugged, but does the airline have to cough up based on where the passenger sits (based on manifest perhaps)? Presumably an on-board move of a passenger up a class which is not reflected in the paperwork is beyond the grab of the UK tax man, but what about the pre-departure upgrades? Would there perhaps be an incentive for the airlines to upgrade "after the gate" (board in Y, but have an instruction list to crew - Pax in Y seat 87B, move to J seat 14F after doors closed), to reduce tax payments?
