I thought they famously did the opposite of this by overbooking flights

Both happen. Keeping seats happens more often in Europe.

I flew Munich-Oslo yesterday. Look at the prices for that route for later today, for next week and for next month. The seats are the same on most of the aircraft, the available business class you see is just regular seats being kept free for expensive tickets. And when the search engine says "4 seats are left at this price", that means that the airline is keeping some to sell at higher prices.

That's relatively rarer in Europe compared to USA.

Don't know for all europe, but air france overbook all the flights Source: my father was working with the CEO.

Which sometimes causes that you are upgraded for free. ;)