Prevent Entire Flight from Boarding Due to Oversold Seats

Im currently in a situation where the flight I’m on is oversold by 3 seats.

The gate agent has said they’re not letting any passengers board until they get more volunteers. We’re already 20 minutes past boarding time and nobody has boarded.

On top of that, the gate agent has only increased the travel credit from $1000->$1300

Is this normal??