A deadheading crew under no circumstances are to be offloaded, it states quite clearly under the booking, however those passengesr that have onwards connections at EHAM are to take priority over those that are just traveling the one sector. This is obviously done due to the cost of compensating one sectors rather than the two.
KLM will allow their seats to be oversold by approx ten passengers this will make up for those business passengers that have altered their travel arrangements.
At CWL passengers are not upgraded/downgraded until chech-in had closed, this ensures that the flight is full rather than empty seats being on-baord due to pax refused at -60 mins. All standby pax are then told at the gate whether or not they will be travelling.
This is not an ideal situation, but KLM is a customer (A verry good Customer?) and that is what they require. He should just be greatful that he didn't have any cancellations due to teck aircraft or downgraded to a F-50 as he would have something to moan about (fokker 50 no business class).