Any airline that sells Basic Economy tickets (without seat pre-assignment) does by allowing seat choice for Economy tickets and above.
In fact, Frontier charges more for the middle seat. I assume this is because middle-seaters are likely to be a couple/family wanting to sit together and forced to pay the premium. No solo traveler would willingly purchase a middle seat, so you don't need to optimize for pricing the middle seats for them.
Seems this wouldn’t work very well. Pick the aisle and window; middle will always trade IME. If you need three across, book aisle, window, and a nearby aisle and you again have tradable seats.
Or book aisle and aisle for a couple.
Maybe they’re just picking up a few bucks from people who aren’t this clever.
I’ve seen this a lot more over the last few years with US carriers. The bottom tier ticket doesn’t let you choose and you have to pay more to get a choice (aisle or window).
It definitely used to be more of a first-book-first-choice policy but now they’re using it as another upsell.