Every airline oversells every single flight. That's normal. If they can they will. Overbooked is if the flight has more people than it can hold. A flight can be overbooked and not full.
That will change as part of the "Dao Effect". As you alluded earlier, "overbooking" will cease, but the price of fairs could go up. Another alternative is to raise the number of
"non-refundable" fares and/or increase the price of changing tickets or missing a flight. Either way, you are correct; the costs will be passed to the consumer. Planes will leave with "sold" but empty seats unless an employee wants them. "Thanks, Dao!"