In the proposed system, I don't understand how is it going to work if a passenger who has not paid for a specific seat takes his/her chance with the current rush to get a seat only to find it has been assigned by the check in to another passenger.
Those who don't pre-select will be allocated a seat by the airline. The plan is to seat as many people together as possible in relation to their booking reference. It is probable that the seats are allocated before check in opens.