I think it was theoretically a genuine thing at one point, but it at the same time has always been somewhat redundant. I believe 11k was the number which used to be quoted and if 11k had given their tickets up after the first PL season of finishing 7th, qualifying for Europe and losing a cup semi, then a very high proportion of the waiting list would have taken them and the rest would have gone whilst on general sale. Of course other than people facing a change in personal circumstances nobody wanted to give it up then, so very few people were offered one. Now people are walking away, but the 11k aren't interested for the same reasons the people haven't renewed.
Fanbases of clubs our size are always elastic, we'd have got 40k for most games in those first 2 PL seasons prior to Covid, but if we were to go down we'd be back to early 20s for that Tuesday night game against Millwall, maybe lower if the pricing remained stupid.