The seats on the left side are the ones that are converted - I think that either the middle or the two sides are folded down to create a wider armrest, but I'm not sure... it's been a while since I've seen them "in action".
The tray table, by the way, for that middle seat is not smaller than other tables, it's just folded on the left and right side as well (so you don't only fold it down, but also to the sides): that way it fit's the small space and still has the normal size.
As to other airlines, I think a few other airlines actually do use those (or similar) seats, but in the case of LH
those seats are on their way out: they'll just leave the middle seat free in C-class. I think they decided against these seats because the mechanism adds too much weight to the plane.