I have a situation where a traveler paid $11 to be able to pick their seat in economy as part of some sort of pre-check in.
From what I can tell, the fee is not an upgrade, per se, but rather a way to ensure one actually gets a seat assignment when flights are being routinely overbooked.
My instinct is to charge the fee to non-sponsored to be safe, but I could see it going either way, since: a. it's not a class upgrade; and b. the amount is arguably immaterial.
Travel by air is limited to the lowest, non-refundable, coach/economy class fare available at time of booking. Travelers may select their seat to another seat within coach/economy (exit row, aisle seats or "extra leg room") on any flight, when no other coach/economy seats are available or it better meets the traveler's needs.
Based on UG and in my situation NSF, I think it's clear that upgrades, seat selection and comfort economy, might be allowable in very specific well documented circumstances. A concern I have is it's all at the travelers word that nothing else was available. While I have zero interest in being the morality police, I see a pattern of minor upgrades that seems awfully coincidental.
(i) Require circuitous routing;
(ii) Require travel during unreasonable hours;
(iii) Excessively prolong travel;
(iv) Result in additional costs that would offset the transportation savings; or
(v) Offer accommodations not reasonably adequate for the traveler's medical needs. The non-Federal entity must justify and document these conditions on a case-by-case basis in order for the use of first-class or business-class airfare to be allowable in such cases.
Now, if the PI has a strong enough justification for the comfort seating upgrade and you are comfortable defending it, for example: the comfort seating upgrade was due to something medical, than you could approve.