Doubletrouble, yes when you sell, all outstanding reservations are cancelled. I think back a few years that wasn't the case but it was changed to this policy. I'm not sure what happens to the status of points but I assume they would follow regular guidelines -- borrowed and banked points stay in the year they were moved to, Holding Account policies apply, etc.
Mitros -- Jaysue explained it well. It usually ends up working out. If you have extra points it makes even more sense because you can hold onto your original reservation and book the new dates at the same time. As it all comes together, you release what you don't need.
Here's the advantage: You want to book 5 nights. March 22-27. You waitlist for that entire week. I want the same nights but do it day-by-day.
You will have to wait until someone cancels all those nights at one time or
DVC sees all those night available.
Day-by-day I get a call from MS because someone cancelled 3/22-3/23. I take those days. A few days later someone cancels a trip from 3/15-3/25. I get a call because 3/23-3/24 are now available. Then someone else cancels their 3/25-4/4 trip. I get to scoop up my last few nights.
The waitlist has worked for me. I've gotten 3/22-3/27.
You are still waiting for all the dates to become available in a block.