So, our collective wisdom is:
Cancellations to rebook so a VIP owner uses LESS points will not happen ... as MOST cancelled reservations could be someone else's VIP upgrade? Unless it is the lowest size unit in the building/resort?
And automatic upgrade could be done by some computer selection process ... like VIP level, date of booking reservation (earliest is first), upgrades giving to select member number (who brought POINTS last from Wyndham, who brought MOST points from Wyndham, who NEVER cancelled a direct brought contact from Wyndham, who is on a Discovery membership, Wyndham to snag upgrades for their rentals FIRST, etc).
The old system is now looking more fair ... the owner must personally and manually do the upgrade. LUCK is just that. Manual actions like the "cancel & rebook" do carry a risk for the original owner ... as most TUG members who do this sometimes, have learned. It I WANT or NEED a particular HIGH SEASON week, I don't play ... I could lose it and some savings are NOT worth the risk. (As for the topic of BOTS, that is a major security issue Wyndham must prevent .. IMHO).
BUT Wyndham still will most likely change over to an automated system ... the wait list idea, but will most likely have 'chits' to give more value to SOME users. Why some? Upgrading is a marketing function (and they DO pay for upgrades) and that will be PROGRAMMED to benefit who is buying .. like the "Discovery" program buyers.
And I know very well, I will NOT work to get a points discount on a reservation I used ARP points to book ... as I will be the loser. It has become more likely I will lose.. but if I am wishy-washy on a reservation, I will gamble on getting a points discount.