Just before boarding, maintenance fixed the seats and the two bumped passengers were allowed to board and made $600 in the process.
Unlikely that they kept the compensation. The way to process usually works is that they solicit volunteers willing to give up their seat for the agreed upon compensation but those volunteers become standbys. They are only removed if the airline ends up needing their seats. If they are bumped, the compensation is awarded and they are rebooked.
Aren't Airlines prohibited from overbooking flights now?
No. Overbooking is still common, though it is far fewer than most might assume. A flight might allow one or two over capacity but it is not normally much more than that. Sometimes economy will be overbooked significantly but first class/business is then restricted by the same number so that the overall flight is not overbooked.
It is important to understand the distinction between overbooked and oversold. Oversold is when there are more passengers at the gate than the plane has seats. This can happen due to overbooking, or because a seat(s) is broken, or a must-ride crewmember or mechanic is put onboard, or another flight cancelled, etc.
Do those numbers include the assumed weight of carry-ons?
Yes, but it's more complicated than just "yes".
The personal item is always included in the passenger standard weight. On the smallest airplanes, some operators choose to structure their carry-on program to disallow the larger carry-on bag in the cabin. This results in a lower standard passenger weight. In that case, the carry-ons that are valet gate checked then have their own standard weight applied.
On larger airplanes the weight of a personal item and a carry-on are included in the standard passenger weight.
Airliners are most frequently landing weight limited. Even on a short flight, they are weight restricted based on their landing weight limit at their destination. This means you can't generally have four or five hours of reserve fuel onboard if your flight is full, even if the airplane has the range to fly a five or six hour leg. It is rare to be limited by the airplanes structural takeoff limit weight.
