employees of their own or of other carriers may be denied boarding without compensation because they do not have reserved confirmed seats
I believe this relates specifically to employees on "stand-by" for carriage and would apply to even those employees travelling on business with confirmed seats. Speaking as one of those types.
Was trying to think of any other business transaction where you could be refused a "product" after you had bought and paid for it and had started to use it (by being seated, awaiting movement to destination).
Can't think of one.