I firmly believe you have to take overheard conversations with a grain of salt because you don't know the context of the conversation, the backstory, etc. You could just as easily make the assumption that the hubby had actually purchased Full fare F seats for his wife and child but didn't want the wife to know he had spent the money....so he leads her to believe they were "upgraded" at the last minute which would cost little or nothing (depending on how he did it).
Also, they could be "non-rev" passengers, which the flight attendants would know from the manifest and they would probably be ok with them taking the empty seats, since they would be entitled to them. (non-rev passengers are airline employees) again, backstory info that you would not know just hearing the conversation.
Anyway, i agree it looked bad, lol, and could also be interpreted the way you wrote it, but then again, extremely unlikely.....unlikely that there would be 2empty seats in F next to the man, and unlikely that the FAs would allow a coach passenger to just sit in F without a proper boarding pass. It's completely against the rules for FAs to do so. Doesn't mean it never happens, but it's very very rare.
Once I was seated in the first row of coach because my upgrade had not cleared before boarding. After everyone was on the plane the gate agent walked on to the plane to give me a new boarding pass for an F seat because someone had not shown up in time. She had told me when I boarded she didn't expect the person to make it (tight connection) and that she would come get me if so. Well, of course, I was watching that seat in F stay empty throughout boarding and as soon as the gate agent stepped foot on the plane holding a BP, I knew it was for me--she didnt get near me at all, just caught my eye and handed the boarding pass to the FA at the door--I jumped up, walked into F and sat in the seat in full view of everyone in coach. If you didnt know the backstory, it would look like i just jumped into and helped myself to an empty F seat at the last minute. I'm sure there were folks in coach who interpreted it that way and were wishing they had thought of it first and folks in F who thought I was just helping myself to the empty seat against the rules.
anyway, just meant to show that you just don't know.....