I still cannot understand this as well. Basically you need to exercise your privilege only when flight is closed for sale, otherwise you can just buy a ticket as all other passengers do. If the flight is closed for sale it means that there are no any kind of fare valid on this flight. If there is some booking class still available it means anyone can buy it.
For example LH Senator (which is I believe the same class as CX Diamond) can get a confirmed seat on flight which is sold out on a basis that he will buy C-fare 48 before the flight, or Y-fare 72 hours before the flight, and these conditions are clearly specified in rules. LH HON is basically the same on this matter.
So I'm second to chornedsnorkack question - how exactly it works with CX Diamond? There are probably about 10 different booking classes in economy, ranging from very cheap to expensive, so you can choose which one you want?