I am about to find out.
I just booked the St. Pancras in London with points, and am paying 30 GBP for the upgraded room.
will see what they do with this.
I think in the past when I have used points, and then charged meals, services, etc, I have gotten the points on my expenditures but not the nights.
If a member pays the room rate, and uses points to upgrade the room, it would still be considered a qualifying stay and therefore earn Points/Elite/Promotion credit.
If a member is redeeming points for the room rate, and pays cash for the upgrade, it's a redemption stay and therefore would not be eligible for Elite/Promotion credit. However, the cash upgrade would be considered an incidental, and therefore earn points.