There is statutory consumer protection against overbooking causing denied boarding, just like there is statutory consumer protection for covering reaccommodation costs during substantial delays or last-minute cancellations.
The trouble is, nobody seems to have any oversight of how this is conducted. So airlines who have overbooked can say "Your reservation was cancelled" and there is no apparent oversight if what they say is true. Or you can be told at the check-in desk "Cancelled due to weather so no compensation payable" when it is CAVOK outside and the maintenance crews all at the aircraft with the cowls open is a bit of a giveaway.
So it seems to have become a bit of a standard management game to see what percentage of otherwise-valid statutory compensation can be saved by a bit of Economy with the Truth. Some management seem to be aiming for 100%. Possibly it is part of their bonus incentives nowadays ?