BRUpax
I've already made my position clear in my first post
Now let me say that I would not wish anyone to be left behind and if there are seats free (including the middle seat of 3 that this airline does not fill in C), they should be used to accommodate pax under these circumstances.
No problem with the decision, big problem with the lack of care for people who paid full C fare.
They should refund the difference, since they didn't deliver their advertised service. C class pax should not subsidise management decisions to downgrade services.
Alternatively, if they don't wish to compensate C pax, they have to bump the extra Y pax onto another flight and safeguard the C service, a decision that would be harsh to the Y pax, but an airline can't have it both ways.