From FlyerGuide Wiki

What are Capacity Controls?

• Capacity controls are limitations on the use of award seats similar to the limitations imposed on the availability of low fares on peak-demand flights. In 2005, Southwest decided that it could no longer afford to make every seat available for award travel, even with a dozen or so "blackout" dates such as the day before Thanksgiving excluded from award travel. Some flights to leisure destinations at peak vacation times were being filled primarily by award travelers.
• Beginning February 10, 2006, all Awards issued have no blackout dates but are subject to capacity controls. As of mid-February 2007, the old awards without capacity controls are history.
• Standby travel appears to be allowed on a capacity controlled award only if you have a confirmed award reservation for the same city pair on the same date. That is to say, you have standby flexibility equivalent to a full-fare passenger once you manage to get an award seat on the correct date.
• Companion Pass reservations are not considered awards and are therefore not subject to capacity controls. If the CP Holder has a seat, paid or not, the Designated Companion can take the last available seat in the airplane.

Can I use double the number of awards to avoid capacity controls?

• Yes. As on November 8th, 2007, two Rapids Rewards Standard Awards can be traded in for a Freedom Award, which has no seat restrictions, but has 9 "blackout" days around Thanksgiving and Christmas.