If you call for a reservation in a certain category, let's say category 10, and they're full or nearly full, so they assign you a Guaranty Category (GTY). You pay the same price and you are Guaranteed to have a cabin in category 10 or higher.
Suppose they have 100 cabins and 110 reservations, with the last 15 being taken as GTY. From experience, they know that just before the final payment date, an average of 10 percent of the people have to cancel or reschedule, for one reason or another. I'm sure there is a cutoff point where they know it would be foolish to book additional GTY cabins because it would most likely require the higher cabin. For example, they wouldn't want to book 200 reservations if they only had 100 cabins total.
Right after the final payment date, 8 people have had to cancel. Now they have 102 reservations for the 100 cabins. They make cabin assignments in category 10 for the 13, and the remaining 2 that are in GTY status have to be upgraded. So they look in category 9 to see if there are two available cabins, if so, they assign them there, if not, they keep looking higher.
My example is very basic and there are probably several complications that could be encountered that would make the outcome different.
DCL gives complimentary upgrades when the situation is necessary for them. They don't usually move people up to higher categories just because space is avalable.
hope that helps