I called and asked about this a few weeks ago. You would still get free dining, however, they must check if any "free dining room" are available. My dates are sept 27 through oct 4 and the only resort available is caribbean beach resort.
I have decided to stay at Pop though. It doesn't hurt to call and check
We were told we could only upgrade (and keep free dining) If we upgraded to a resort that had NOT sold out its Free Dining rooms quota. SInce we wanted WL, and they had sold out their quota, we couldn't upgrade and still have our free dining too. This was while we were there this August.
Good to know as I don't know how happy we will be at POFQ. I think the pool is going to be great for the toddler but rooms seem so dark and no place for the tv other than on top of a dresser? I would hope for better.