Ryanair absolutely does this. I've been on a flight in the last 3 months that was +2 oversold. Everyone else had checked in online earlier than me and gotten a seat assignment, so I was held at the gate, unable to pass, until the gate was ready to close and they had confirmed they had a seat for me.
The 'rules' state that they're supposed to ask for volunteers, but in this instance, they didn't. I was just withheld from boarding until they confirmed they had a seat for me.
But you can't even get to the gate if you haven't checked in, at which point you get an assigned seat. If you somehow managed to get past the entry point and security without checking in then something went wrong at the airport, not with RyanAir.
I don’t think this is true — every airline that I know of supports “seat assignment at gate” to handle exactly this kind of overbooking.
(How it happens can vary: your PNR might not have a seat assigned, or the seat might have been double booked. Either way, at check-in they’ll typically notify you and let you through regardless, since you have a perfectly valid ticket.)
Same as the sibling comment already stated, I was able to check in, and instead of being assigned seat 24B (or something of that calibre), my boarding pass said “seat assigned at gate”.
I still had a valid boarding pass. Nothing went wrong at the airport, besides Ryanair failing to follow correct overbooking procedure. Fortunately in that instance, had they refused boarding on me, I would have suffered zero inconvenience, and have received 350 euros compensation and a flight the next day. In a way, I wish they had refused me that day.
Pretty insane that this can happen in the first place, but I guess with something like Ryanair I can see how people might want to play it safe then!