In may be within the letter of the Regulation, but is not within the intent. Squeezy is hoping you are ignorant of the Regulation. They win if you are.
The downside of this is more intervention by Regulators.
The EC has suggested in the past that airlines should not be permitted to involuntarily deny boarding - i.e. that volunteers must be found, even if it results in a bidding war.
It would serve Squeezy right, if this was to occur.