It’s more thank likely a simple algorithm used to calculate overall total revenue, nothing to do with status.
For example if someone in a balcony bids 500 on a grand suite and someone in a JS bids 600 on a GS, who wins the bid?
It really depends. Let’s say no one else bid on the JS, but someone bid 300 to go from OV to balcony. The balcony person would get the GS at the lower bid because it’s more overall money for Royal (800 for balcony and GS upgrade rather than just 600).
Its of course a lot more complex with so many staterooms at play and people only being offered certain rooms, but’s that’s basic concept of how upgrade programs generate maximum revenue. Mo magic, voodoo, or loyalty at play.