I was told by the LA that they look at first place choices, then if there is still room, second place and so on. So where a school is very oversubscribed, they always get filled up by first choice pupils. If you live right next to a school, you won't get a place just by putting it on the form.
Categorically incorrect and illegal.
It's a fairly straightforward algorithm for a computer. Rank all applicants for all schools in order. Additionally once ranked add the preference position. So Billy Jones, Town High, position 23, preference 2. Billy Jones, City High, position 35, preference 3. Billy Jones, Country High, position 400, preference 1.
Then where an applicant has a place in more than school, save the highest preference and remove from lower preference lists (but keep on higher preference lists). So Billy Jones gets a place at Town High and City High, so comes off the City list, but stays on the Country list. This happens concurrently for all applicants, then once each applicant is on their highest preference list, and removed from lower preference lists, repeat the whole process as the removal will have meant those left move up the ranks. Billy finds after loop 3 that he is in position 100 at Country, so gets a place.