The way I would look at it, using a technological solution.
Install CCTV on each train if not already there.
Hook CCTV up to a computer and deploy existing software used in supermarkets to count passengers as the enter and exit train.
Have a set value of loading on particular trains, routes & times
When this is exceeded by x, automatic announcement that 1st is declassified.
When exceeded by y, automatic announcement that due to overcrowding, all passengers on train at the time of announcement is entitled to compensation.
Announcement repeated between stops until passenger level drops below threshold.
Log automatic announcements with relevant TOC.
Process claims as per delay repay sending details of affected ticket.
Siemens have got the technology to monitor how many people are in any given part of a train, and relay that information on to be shown further up the line (and presumably via apps etc).
I have no idea if the Thameslink trains will have this, as I think it was featured in a video they did early on?
Whether this data could see first class automatically declassified is another matter, but it could certainly mean a record is kept of how busy any given service is - and that could be useful for planning future timetables, or understanding when there are some previously unpredicted flows (given surveys aren't done very often).
Apologies about my rant yesterday but you are spot on, that is pretty much exactly what I was saying. And people just kept on replying saying well the terms and conditions say yadda yadda. Would it not be better if these terms and conditions were made clearer to passengers before they buy a ticket, if they can, rather than pointing out the small print on the back of the ticket they may or may not have purchased afterwards.
Bear in mind, a pub must publish a price list of everything it serves. But that's usually quite a small bit of paper in a not particularly visible location.
As such, I wouldn't expect to see any warnings that would be THAT clear, but would still tick a box.
On a TVM, you can make people aware of the T&Cs and I suppose the ticket window itself might be able to have some sort of notice nearby to warn people too.
If you feel passionately about it, you've got a number of avenues you could go down - like writing to ATOC, the DfT and individual TOCs.