https://www.southwest.com/help/changes-and-cancellations/ove...
https://www.southwest.com/help/changes-and-cancellations/ove...
The effect is the same either way. Someone paid for a ticket and they don't get to board the plane.
The airline sold you something that they can't deliver because they refuse to keep extra planes around. They refuse to keep extra planes around because that would eat into profits, and would mean their execs wouldn't be able to buy their third gold-plated yachts.
Another way to think of it is what could an airline have reasonably done to avoid the situation? If it's overbooking, the reasonable thing is to not overbook. If it's overselling, they could choose not to fully book their scheduled equipment, but is that reasonable? They can't choose to have 100% reliable planes and crews and weather and ground operations. Stuff happens, and it's certainly reasonable to be upset when it does, but understanding why it happened can be helpful, so making a distinction between overbooking and overselling makes sense to me.
Seatguru says [1] southwest flies three variants, 737-700 with 143 seats and 737-800 and 737-Max 8 both with 175 seats.
If a -700 gets substituted in, that's a lot of missing seats. I've also flown on planes where one seat is out of service for whatever reason and usually has a plastic cover on it.
[1] https://seatguru.com/airlines/Southwest_Airlines/information...