Currently doesn't the wait list work such that it just runs every so often, to look for availability, instead of being set up to take things as they become available?
I have heard of people who do what the OP described. My first thought was that anyone on the wait list would have their reservation filled before it was made available for others to book.
But this is not how the wait list was explained to me.
I do know people who will re-book using points they consider to be lower value, if they see availability at 7 months, but that availability is there BEFORE they cancel anything. This is not at all unethical or at all a scam.
They then recover their original points by canceling that reservation, and maybe they rent them out or maybe they just book something further into the future.
IF the wait list is working as it was described to me, I fully expect that to change. It is just makes too much sense to change it so that wait list requests are filled when reservations are cancelled, before releasing the slots to someone else.
Even as long as the wait list is not working this way, there is a reasonable probability that someone else will book that reservation before the person who just released it can grab it.
Years ago there was a flaw in the point transfer system, where transferred points were picking up the properties of the account transferred into, and not the account transferred from. I did hear of people taking advantage of this, by transferring their points from one resort into their account for the other resort. But I think this hole was plugged a long time ago.