But what do they do about misconnect or bumped bags in a case like this? Expedited bags don't ride with their passenger.
In the US, the procedure for those kind of bags are considered "RUSH" or Expedited Bags. These bags are only loaded when the passenger for example, already completed their flight at their destination (say LHR to EWR), but their bag did not make the actual flight they were booked on. So the outgoing station re-flights the bag with the Rush or Expedite designation, which that bag arrives, it can be claimed by that passenger. In layman's terms; if the passenger did not travel, the bag does not go aboard the aircraft. A RUSH or Expedite bag goes on ONLY if the passenger has already traveled to that destination on a previous flight (and the manifest confirms that the passenger did travel), and once confirmed, only then the bag can be sent without the actual passenger aboard. The bag has to be sent with paperwork behind it so it won't be flagged by PPBM (Positive Passenger Bag Match) rules.
Some airports have a Baggage Reconciliation System (BRS), which is good to prevent these errors. The loaders would have a small machine and scan each tag. If the passenger was offloaded from the flight it would give do not load message. It is a good system as it would tell you exactly where the bag is loaded. For example 15th bag loaded into hold 5, or 21st bag loaded into container 23456 position 45L.
That's a pain in the ass, especially on a narrowbody. But at least on a widebody, you can pull the can instead of moving 100 plus bags (unless the bags are on a pallet!! No fun breaking down a pallet with a lot of bags and the culprit is in the middle or on the bottom). BRS along with PPBM prevents these errors, but if passengers are in the terminal and have already checked in - the scanners will let you load the bag upon check in - and if the passenger do not board in a timely fashion, the bag has to be pulled. Your scanner will send you a message to pull the bag (and also will get a call telling you to confirm the action so that bag won't ride.) There are fines involved if a bag rides without PPBM. And then putting the bag back on if the passenger makes it at the last minute. That's why there is boarding time where you can't be drinking in the lounge or elsewhere and miss the boarding calls.
A comment from an Ex CON: Work Hard.....Fly Standby!