CO had over Premiumed the 500 with under 100 coach seats in a 10/94 setup. It was out of line with their fleet (and not space efficient). Good for elite members, but not for revenue (I used to love that I was on a 500 for that reason, as upgrade was very likely even for little Silver me).
So they are first just removing a row of First Class and adding 2 rows of coach to make 6/106. And then as the planes go in for longer servicing, they will reconfigure the front galley and closet to add back two first seats to end with 8/106.
The ultimate result is two fewer first seats and 12 coach added. Not a bad revenue reallocation. Also likely since they no longer serve real meals on most 735 routes, they don't need as much galley space...
I could also see them doing a similar thing on the 300/700 in the future, going from 12/112 to 8/124. And their 800 could easily change to 12/153, the 900 to 16/158.
Which has nothing to do with ATA, but you brought it up.
Of all the things to worry about... the Wookie has no pants.