I flew LAX - TLV on El Al
When I booked the ticket I put in an upgrade request from Premium Economy to Business ($450 + 32,500 points). At check in they said flight was full but to check at gate.
When it was time to board, the agent scanned my ticket and the screen said 'see agent". They sent me to the gate counter where they simply handed me a new business class ticket.
I boarded, got settled and the plane was just about ready to take off when an agent came back on board and and told me "the person showed up" and now I need to go back to my original seat in premium economy.
I politely said sure no problem as if nothing happened and went back. I suspect it was maybe a crew member or Top Platinum who decided to come on standby or something like that because boarding had been completed and the upgrade had gone thru just prior but I didn't ask them who showed up.
I've gotten upgraded to business on the plane once already seated in economy but never had been downgraded onboard once upgraded 
I submitted an online inquiry to El Al but not expecting anything honestly. I'm no worse off than what my original plan was but certainly an interesting experience.
you're entitled to involuntary downgrade, good luck getting it from LY.
Next time put up a fight lol 😔
@nafnaf12 is right. The minute they issue a ticket in Biz, any more to a lower class is a downgrade.
If your flight was to / from Europe you would get compensation through EC261 - here it will hard to get anything.
BTW I had a
simiar situation when I had a confirmed ticket in Biz out of JFK; I was coming from a connection which was tight (though I did email ElAl that I would make it, and i checked in online, no checked luggage).
I showed up at the gate 15mn before departure - they told me that they had removed me from the flight and given my seat to someone else because they didnt think I could make it on time. But not to worry, they went in, 'downgraded' the guy that they had upgraded, and gave me my seat.

Situation like this shouldnt happen, but it is what it is with El Al