That's not a rumor. It actually happened exactly as you state. Luckily for him, since he bid F/O to F/O, he was able to bid E190 Captain on the next bid since you're allowed to upgrade off of a seatlock, as long as you're not on a downgrade (Capt to F/O) seatlock. It could have been much worse. The company will absolutely hold you to your bid, so be careful what you bid for.